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Comment by tw1984 | Hacker News Reader

tw1984·

In 1985, USDJPY was around 250:1, why 160:1 is now a problem?

With almost all of its industries no longer in a leading position, with its car industry being demolished by EVs, 250:1 is what it is heading.

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Because that was 1985, and this is now. Entire supply chains, input costs, planning, etc. have been built around the assumption of the JPY trading in some sort of range.

Of course that will change over time, if it hasn't already. The Japanese government's messaging about this has been that they're not really worried about the currency weakening (after all they're massive net exporters! it should be a good thing), but rather the speed at which it's happening.

Most large companies hedge their exposition to FX rates.

FX futures, but yes.

Many don't though, and even if they all did, you can't hedge forever. Hedges are also rolling, so as some hedges expire the companies need to set up new hedges, which are at a worse FX rate. So the hedges lessen the impact but they aren't perfect, otherwise they would not be called 'hedges'.

Because you cherry-picked 1985. It went below 160:1 in 1986 and hasn't been back since, until now. So it's the weakest it's been in literally 40 years; that's at least potentially a big deal.

Just buy the bottom and sell the top. Are they stupid?

USD is falling vs euro so EURJPY is even more bleak. USD in general during those times was way stronger than it is today so those numbers are meaningless.

I haven't checked USDEUR in years and it's exactly where it was last time.

In late 1945 the exchange rate was 360 yen to 1 dollar. If that was good in 1945 then it should be good in 2026 because nothing ever changes.

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