Yen collapse

Yen collapse, Former Morgan Stanley chief Asia-Pacific economist Andy Xie has warned that the Bank of Japan's aggressive stimulus efforts could lead to a collapse in the value of the Japanese yen on par with the Russian rouble's 1998 collapse, according to The Australian Financial Review.
The Bank of Japan recently announced plans to inject $US1.4 trillion into its economy over two years to jump-start economic growth. The massive figure, worth about 30 per cent of national output, has
sent the Japanese yen down about 20 per cent against the US dollar since late 2012, while Japanese shares have jumped around 40 per cent since then.But instead of a massive round of quantitative easing, Mr Xie said the Japanese economy is instead in need of structural reforms aimed at boosting productivity.
“What the BoJ is doing is forcing the big Japanese insurance companies and pension funds to go abroad,” Mr Xie told the AFR.
“They are being screwed. With such a huge amount of funds in the Asian region the theory is they have to go to the Nikkei or US treasuries and the hedge funds are front running that.
“What it means is the yen will collapse like the Russian rouble in 1998. What the central bank is doing is they can't see the end game, but the end game is chaos.”