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Because Japan is holding a Trillion Dollar? Although granted Japan's reserves did not grow particularily fast last year so Japan's currency manipulation may well be a thing of the past.

And then there is this:
How Japan financed global reflation

In 2003 and the first quarter of 2004, Japan carried out a remarkable experiment in monetary policy ? remarkable in the impact it had on the global economy and equally remarkable in that it went almost entirely unnoticed in the financial press. Over those 15 months, monetary authorities in Japan created ¥35 trillion.

[...]

The Bank of Japan gave the ¥35 trillion to the Japanese Ministry of Finance in exchange for MOF debt with virtually no yield; and the MOF used the money to buy approximately $320 billion from the private sector. The MOF then invested those dollars into US dollar- denominated debt instruments such as government bonds and agency debt in order to earn a return.

by generic on Thu May 29th, 2008 at 02:08:02 AM EST
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