ksandness

I'm a free-lance translator who gets part of my income in yen when I work for Japanese clients.

The current exchange rate doesn't look that bad. You had me worried there for a moment.

mkjr

Fair enough. I'm just happy the cdn is going up again against the yen. I don't want to sound like too much of a dck But yes, that's a decent savings but currency is a risky bugger

Pickles

Classic case of what economists call revealed preference. Or "watch what they do, not what they say". If you really had high conviction on the JPY, you'd wait. But you don't, and you think there is a probability that it's actually not going to depreciate, or maybe even appreciate. One can even calculate your subjective probability of that happening based on the amount you're buying now versus your total final position. If you were intending to buy $100,000 worth of JPY and you've bought $2,000 now, yes, you have reasonably high conviction. But if your total expected position is (say) $4,000, that's no better a guess than 50-50. Nowhere near high conviction.

joejones

Buying yen in cash at a bank is ill-advised. Buying thousands of dollars worth, months before you actually need it, is just nuts.

TMM1982

I've had friends who've traveled internationally and tried to hit the ATM machine once there and their debit cards didn't work and their phones weren't set up for international calls in order to reach their bank. It was a damn disaster!!

TMM1982

Except I said my final position would be about $8,000 USD worth. So if I bought $2,000 on Friday, that's more of a 75-25 proposition which is very near high conviction.

armagebedar

The JPY is relatively stable versus the USD at approximately 120 JPY to 1 USD. I wouldn't call this "destroyed" given we hit 124 JPY to the USD last year, as another poster mentioned.

abmj-jr

I can remember when it was over 135 and bouncing up almost to 140 several years ago. I was really getting a LOT for my money back then.

hailstorm

It was pegged at 360 yen per dollar for decades. One of major reasons why Japan rose from the ashes of WW2 to become a worldwide economic power.

Steve M

The answer to this is to always be sure to have a few hundred dollars in USD on your person when traveling internationally. If everything works out well with using credit cards for lodging and large purchases, and cash from an ATM for spending money, then you just bring it home with you and your backup plan "insurance" cost you nothing. But if you have card problems, there are very few places in the world where a US$100 bill can't be turned into the local currency fairly easily.

txflyer77

+1 This is the simplest plan for the vast, vast majority of tourists. A few days expenses (plus a little) in crisp USD, a debit card from a bank that will overnight replacement cards internationally if needed (Schwab is one) and a few no-FTE credit cards.

For extra security bring a debit card from a second bank.

I can't think of any reason to carry thousands of dollars in yen to Japan for the average tourist.

gnaget

The JPY correlates inversely with global stock markets, including and especially the US market. Part of this used to be a carry trade pre-2008. I think the JPY will strengthen in parallel with the nascent bear market.

Negative interest rate does not mean that the Japanese money supply will suddenly increase.

Japanese QE does not expand the money supply the way that US QE does, so you will notice that M2 has continued to increase by 0-2% p.a. like it has since around 1990. I will not get into details here. In fact, the JPY is historically quite strong at 120 if you consider the Bretton Woods peg at 360. I think it overshot a bit in 2009-2012 and fair value lies in the 100-110 range. The USD is overvalued across the board like in the 1999-2002 bubble market. There is often a time lag with currencies but it should start plummeting after the US market peak, which probably happened last summer for this cycle.

If you want to look at another country with strong currency and negative interest rates, consider the CHF.

Anyway, if you want to speculate or hedge JPY then you are better off buying/ selling the FXY ETF or opening an FX account.

If you do something ridiculous like buying cash JPY from a US bank then you probably are paying something absurd like a 10-15% spread. I am not joking. I once looked at the prices at Travelex at a US airport and you would lose 17% if you purchased EUR there. I guess that they prey on the ignorant one time traveler.

TMM1982

What are your reasons for thinking USD is going to collapse? If you think that then you also think crude is going to surge as they have an inverse relationship. Goldman is calling for $12 a barrel.

abmj-jr

I once walked up to one of their booths when I needed a small quick exchange of less than $100.00. I think it was some old Ecuadorean Sucres back in the 70's. When I saw the rates I just walked away shaking my head in disbelief. Yet they seem to be pretty busy at times.

gnaget

I am not saying that it will collapse (and relative to what?), but the USD is clearly over-valued and commodities are cheap. It's very similar to the dotcom days. As we move out of the current cycle then the USD will weaken and the Keynesians at the Fed and politicians will consider this to be good policy because the US becomes more "competitive".

The problem is that it is very difficult to time this.

Speaking of collapsing, look at long term chart of USD vs CHF.

Goldman was predicting $200 or $300 oil in 2007-8. Well, at least in public. These publicized predictions are for the so-called muppets.