Japan

Submitted by Charles Hugh Smith from Of Two Minds

Japan Desperately Needs A Stronger Dollar, China Desperately Wants A Weaker Dollar: The Fed Can't Please Both

The FX market is about to blow up in the Fed's face, and there's nothing they can do about it.

Foreign exchange (FX) is a zero-sum game: if one currency weakens, another must strengthen. Since the value of a currency is relative to other currencies, all currencies can't weaken together: at least one currency must strengthen as others weaken.

The war on cash just got serious, and of course, it is the extreme policy experimenters of Japan that are pushing the boundaries. Having dived headlong into negative interest rates, Japanee policymakers recognize full well the historical reaction of "hording cash" will not 'create' the nirvana of 2% inflation and break the 'deflation mindset' that they so long have waited for.

Japan is introducing a system which will not only be an alternative to cash, but to card payments as well. Starting this summer, the government will begin testing the new system where foreign tourists will be able to verify their identities and buy things at stores using only their fingerprints. Tourists will have their identities verified, and then be able to make purchases from shops with a flash of their finger when their card details have been processed. RT reports: The system will calculate how much money a customer has based on a fingerprint.

It didn't take long for the impact of the stronger yen, and the weak global economy, to manifest themselves on the company that is Asia largest clothing retailer.

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