i_godzuki

You're welcome.

Why is there a big gap between Japan rates and Western interest rates? It's because Japan has an inflation rate of 0.1% as it battles to emerge from the lost decade. The US cut its rates to 1% after 9/11. If the West are so worried about the carry trade maybe they should slash their interest rates to lessen the gap.

Guardian says it's over.

Agree with your sentiment regarding the UK. Looking at it from afar, one cant help thinking it will end it tears. One interesting thing about your camera, though, is how savvy firms like Nikon, Canon etc have been at using foreign production without firing people in Japan. Canon, for example, still has a policy of lifetime employment and didnt't fire workers during the bad times. Instead, it uses Japan for all its high-tech stuff and R&D and overseas sites for the more commoditized products. It's one of Japan's most profitable companies and has numerous factories in Japan and has recently added new ones. It's a shame that the UK has such a small manufacturing base. It's not all about cost competition.

Not quite sure what RB is on about. How can Japan be in stagflation? The problem is that inflation remains slightly too low for the BOJ to raise rates from 0.25%. This fuels the carry trade. In most areas, other than consumer expenditure, Japan's economy is in a pretty good position. Economic growth is decent, profits are rising and, admittedly with a lag, there are some signs that wage growth will come later this year.

It's now Kolkata, I believe.

I heard it's going crazy in India with people accepting numerous IT jobs and then deciding which one to join on the day. I've been to Chennai and quite liked it--more so than Delhi or Mumbai--but I'm not sure I'd want to live there.

That could almost be an advert...

Please refrain from putting words into my mouth. I meant what I wrote. i.e. that there 's probably limited value with comparing today with the peak rates of 15% and that it would be better to compare over a longer period to question the vailidty of what he says in the article. He said: " people are spending considerably less of their incomes on mortgages than in the early 1990s." Therefore, you'd have to included the average of the early 1990s, not the peak.

Of course, there's probably limited value with comparing rates today to the peak in the early 1990s. What was the average rate during the early 1990s? Also, what was the average size of mortgage at that time relative to earnings?

I saw these reports at the time, but they have to be taken with a pinch of salt. See this story: http://www.businessweek.com/globalbiz/cont...htm?chan=search

I don't think it's that. Japan held rates last week in spite 70% of economists saying they would rise to 0.5%. Most took that as meaning the Feb rise was guaranteed. I reckon the yen is good bet as an investment. The delay to the rate rises has helped weaken the yen but once the BOJ finally starts raising, surely it will strengthen. Meanwhile, surely the pound must slide soon? It's currently at GBP1 to 240 yen. Last March it was 205.

I didn't move due to HPI and like it where I am. Also, I bought a house here now, so I guess I'll stay a while. Problem is, if I did want to return, there's no way I could have the same standard of living on my current salary.

Exactly. Toyota also has six North American plants, one more will open next year, another is about to be announced, and Subaru's plant in Indiana will start making Camrys for Toyota in the spring. What's more, the local content of Hondas and Toyotas built in the U.S. is roughly the same as the local content of GMs and Fords. Also, the yen falling against the dollar makes the imports from Japan cheaper, not more expensive.

Interesting story on yen carry trade.

Exchange rate risk?

The problem is how do you prove something doesn't exist? The emphasis should be on those saying there were WMDs to find them. Not the other around. What is obvious is that Blair knew, from the evidence he had, that it was unlikely there were any. Blix knew this too but would have been stupid to say they didn't exist because he'd need not been given ample opportunity to find them. So how exactly did the war help matters? I'm dying to know.

You make it sound like there was only two options: the above or an invasion. Your logic seems to be clearly the above is bad therefore an invasion is good. Things aren't that simple as the 100,000s of dead Iraqis have since discovered.

2.20 in China! Jeez...

Having escaped to Nihon already, I'd say And booze isn't that expensive unless you buy it by the pint in gaijin bars or upscale hotels. Also, it's true that banks pay 0.1% or something on deposits but given Japan's just coming out of deflation, that's still growth in real terms. I'm no expert but at 230 yen to the pound I reckon some Japanese investment trusts could be sound investments. The economy looks to be stable while the Nikkei has been pretty flat in 2006. Of course, the big risk is the impact of a weakening U.S. but if you think the pound is headed south, there's at least cushion.

Tokyo, Japan. Three years so far and no plans to return just yet.

There's plenty of investment in Japan too. When the Nikkei rose 40% last year most of that was foreign investors. Meanwhile, companies are awash with cash. One reason is the low interest rates, but another is that they've (generally) cleared bad debts and profits are rising. That's leading to some big investments like the rumoured takover of Gallaher by Japan Tobacco. On rates, the Bank of Japan has made it pretty clear it will gradually raise rates with the next rise possibly as early as this month. Next year, is more likely though because consumer spending is taking longer to recover and the lots of pressure to resist from the government.

But surely they will be concerned about the inflationary impact of the weak dollar?

Living here in Tokyo, I've never met actually anyone with a 40 year plus mortgage*. As far as I know, none of the Japanese major lenders go beyond 35 years. Admittedly, I know some people with 30 or 35 year ones but that's because early payment fees are low and, in some cases, they're fixed over the whole period at low rates. In such cases, it can be worth getting a longer deal, saving separately and paying chunks back from time to time. Maybe in a few years people here will be talking about UK-style intergenerational mortgage loans... *I'm aware this is because they're a throwback to the pre-bubble crash

Not really. The expected increase is likely to happen as wages gradually begin to pick up (skills shortages and increased corp profits, despite the lag, should help this. Tthe decrease in the savings rate is down to many things not least the ageing of the society. As people enter old age, they spend savings on things like health care, using up savings. Here's the offiicial line: So the big question is whether increased consumption is just lagging the wider recovery or unconnected to it.