Hiroshi Nakamura
(Translated by Mariko Wada)

Although the interest rate in Japan is rising, exchange rate of Yen is not going up, rather wholly falling. From June the yen has been further weaker against the major currencies, 1 dollar=122 yen level, 1 euro=164 yen level.
The Nikkei (Japan Economic Newspaper) reported the following with the headline “Yen’s depreciation although the Japanese interest rate is rising” on June 2nd.
Foreign exchange market should think about Japanese tendency of rising long-term interest rate, “Interest rate is not only rising in Japan, but also in the world, so it is not by Japanese own reason” (Mizuho Corporate Bank) Europe and America raised long-term interest rate before Japan, and then, Japan followed them. The rate difference between Japan and foreign counties hasn’t become smaller. If the rate difference will not change, there is no reason to buy lower rate’s yen.
Moreover “Even if Japan Bank raised rate in August or September, official rate is 0.75%, it’s still very lower than major countries. “After rate will be raised once, its rising pace will slow down.” (Nikko Cordial Securities Inc.) The movement to buy yen, even if it will happen, must be short.
Rather, the Nikkei stock average went up to 18 thousand yen level recently, so investors could get extra profits, it’s easy for them to invest foreign money market with high rate even though it has an exchange risk.
Mr.Umemoto (Barclays Capital) said, “Indication of Japanese economy is still weak, and the political situation is also unstable. Yen will continuously flow out. Yen’s generally weaker, such tendency will not change. ”

HIROSHI’s worry
We can not hope much better cut flower price than before in Japanese auctions, but on the other hands, if Yen will be further weaker now and later, bulb price in Japan should go up more. It may be difficult for forcers to buy enough bulbs as materials for cut flowers.