Excuse me, but would you mind very much cutting your own throat for my benefit?
Quote of note:
Ending Chinese and Japanese currency intervention carries a new set of risks. A rising yen could potentially snuff out Japan's economic recovery. Many in China fear that floating the yuan and eliminating capital controls could damage China's weak banking system. And if China and Japan were to stop intervening in currency markets, the United States government would need to find other buyers for billions of dollars worth of Treasury bonds.
But American manufacturers would welcome a rise in any Asian currency. A steep decline in the dollar against the euro over the last year has done little to stimulate American exports, because of Europe's weak economic growth.
Hoping the Yen, if Not the Yuan, Will Show Muscle
By EDUARDO PORTER
Even as the Japanese government battles traders in the foreign exchange markets to keep the yen's exchange rate from rising against the dollar, a number of economists on this side of the Pacific are hoping that the markets will win.
With China showing no signs of bending to demands from Washington to let the yuan rise, economists say that an increase in the yen's value against the dollar could help spur American exports and reduce the yawning trade gap.
"It would be good for the United States trade balance," said Ernest H. Preeg, the top trade expert at the Manufacturers Alliance, a business research group in Arlington, Va. "It would be good for U.S. jobs and the manufacturing industry.''
A stronger yen tends to make Japanese exports to the United States more costly, and also gives American exporters a greater competitive edge in Japan.
