By on May 14, 2013


Of course, Carlos Ghosn did not miss this opportunity to talk about his most favorite topic: The value of the yen.  As last Friday, the CEO of Renault and Nissan still does not want to hear talk of a low yen. Ghosn says the Japanese currency “is coming back to normal levels,” and as far as Ghosn is concerned, the yen still has some ways to go. Even if this freaks-out  the CEO of Ford.


For Ghosn, a normal level would be when a dollar buys 110 yen or more. Today, a dollar bought 102 yen, a four year low of the yen.

In the interest of equal time, let’s listen to what Ford’s chief Alan Mulally had to say about the yen two months ago. In March, when the yen traded at around 93 yen to the dollar, Mulally complained about what he called Japan’s “devaluing of the yen”. and he reiterated his opposition a trade free pact with Japan.

“The markets should determine the exchange rate,” Mulally told Reuters. Japan is “the most closed automobile market in the world,” Mulally said for the umpteenth time. “They should open up their market, they should restructure their industry, and that’s why we’re encouraging the people negotiating the free trade agreements that they deal with that.”IMG_4524

The story of other countries devaluing their currency is an easy sell to an American public that generally lacks sophistication when it comes to currencies. Ford and its lobbyists complained about Japanese currency manipulation when the yen climbed to untenable levels, nearly killing Japanese exports. Ford keeps complaining.


For Ghosn, who was offered the job as Ford CEO, and who turned it down, because he did not want Executive Chairman Bill Ford breathe down his neck, said today that “the abnormal situation of the yen is hopefully something from the past, which means we can continue to build this car at the motherplant.” If the yen would have remained at last year’s levels, Nissan would have had to close shop.  “During the dark years of the yen,” Ghosn said, “we were losing money on practically every single car which we were exporting from Tochigi.”

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17 Comments on “Ghosn Wants The Yen Go Lower, Mulally Disagrees...”

  • avatar

    Currency Wars have arrived, with Ben Bernanke & The Federal Reserve, Kuroda over at the Bank of Japan, and Draghi at the European Central Bank all doing their best to devalue the purchasing power of the USD, Yen & Euro, respectively, and it’s going to be fun! fun! fun! to see how this concludes and how much further damage it does to the global economy.

    For the moment, it would appear that based on the alleged “no speaketh of that MOAR Yen devaluation that won’t be cited,” Japan is going to be allowed much more room to run in ruining the Yen (after all, one USD purchased 130 Yen not THAT long ago).

    Central planning, central banking & the non-growth model of economic growth and competitiveness, for the loss.

    Have faith in the monetary overlords, for they’ve only failed at every point in history where they’ve attempted such coordinated hunger games before, so maybe they can finally succeed (or not), and stay thirsty my friends!

  • avatar

    Bertel, how do you get such access to Ghosn… is Nissan just *this* friendly to the press?

  • avatar

    In that first photo, he should pull his shirt over his head so he can be The Great Cornholio.

  • avatar

    Sucking up to the French.

  • avatar

    Just so I’m clear on this. Alan Mulally is the current CEO of Ford,and many will say the architect,of Fords survival. Mr Mulally was a former CEO at Boeing.

    Mr Mulally ascertains,that Japan manipulates the Yen. He also claims that Japan closes thier auto market to the world.

    Okay, so the estemeed “Editor-In-Chief” here at TTAC disagrees with both of Mr Mulallys claims. No, Japan does not manipulate thier cuurency, and Japan does not restrict imports.

    Does Bertel have it right? Does Alan have it right?

    I know who I believe.

    • 0 avatar

      I stayed at a Holiday Inn Express before, so I’ll take a SWAG.

      Every developed nation (or block of nations sharing a monetary instrument, such as the European Union) actually wants to debase their currency, either because:

      a) They have a massive debt level that is not realistically “re-payable” absent devaluation (i.e. creditors might get paid back what they loaned to governments in nominal terms, including an interest component, but in real terms, creditors will be getting it up their asses)

      and/or (and it’s probably AND rather than or)

      b) Their exports become more affordable on a global basis relative to nations who have currencies that have appreciated with respect to said exporter.

      It’s my humble SWAG that Japan, being in an intractable liquidity trap and economic malaise essentially since the early 90s, while also officially boasting the world’s largest debt load as a percentage of their GDP and GNP, has been given reluctant and tacit “permission” to lead the race to debase their currency over the coming series of years, especially since Japan’s economy is so export dependent, and because the Keynesians running the world’s central banks believe that it is only when the average Japanese believes true and heavy inflation is coming that they will spend, rather than save.

      Prime Minister Abe and BOJ Governor Kuroda are a tag team duo that are now promising to be as fiscally and monetarily irresponsible as all hell, in order to rescue Japan’s economy, which will only actually make things worse, but Paul Krugman approves mightily anyways.

      When 20 years of massive deficit spending doesn’t work, Japan merely commits to go full retard with that strategy — because, you know — it should work at that level.

      • 0 avatar

        I think you’ve discounted the importance of the “reserve currency” concept. Nations who’s currencies are strong and stable, have a seemingly endless supply of cheap credit. Countries who debase their currency relatively to their trading partners or who induce inflation are actually starving their credit-dependent economies.

        In my SWAG, developed countries have no natural incentive to debase. The problem starts when developed economies stall due to structural problems like liquidity traps or resource mismanagement. The faltering nation uses a bit of currency manipulation and deficit-spending to boost demand and steal a bit of growth from its well-to-do trading partners. No harm no foul…..unless you refuse to stop.

      • 0 avatar

        I dont claim to be a student of economics, but from what I have gathered, Japan’s debt load is so high, that the capital flight to other currencies and foreign markets that Japan’s uber money printing policy is creating, will thus lead to serious inflation, and likely to significatnly higher debt yields. It is my understanding that their cost to sevice their debt would outpace the country’s total tax revenue with only small movements. Seems a very dangerous game. Hopefully it doesnt happen here when the world economy eventually picks up and the US is finally punished for its money printing.

    • 0 avatar

      I think Mulally is barking up the wrong tree. He has to have Ford make a product unique enough for the Japanese to want.

  • avatar

    The American public does not lack informational sophistication on currency issues, nor are companies like Ford engaged in unwarranted anti-Japanese lobbying. The US has a substantial trade deficit with Japan (and other countries). Prolonged trade deficits suggest the yen should be trading considerably higher. As long as Japan purchases US securities to alter exchange rates and boost exports, they are engaged in currency manipulation, regardless of the actual spot exchange.

    If Japan needs strong demand from the American middle class, what can they possibly hope to gain by making the American middle class dirt poor? The futility of currency manipulation has been twice realized, first by the Asian Crisis and now by the US subprime mortgage crisis. Many nations have demanded a half-step towards sanity. Japan, it seems, is getting incrementally worse. I’m sympathetic with Japan’s plight, but they have chosen to go-it-alone, and a few specious economic arguments against American companies is not going to change the nature of Japan’s economic policy.

    • 0 avatar

      For the U.S. Or any CEO of a U.S. Bqsed multinational to call Japan a currency manipulator is akin to the pot calling the kettle black.

      • 0 avatar

        There is a big difference between moderate deficits or QE used in the United States and treasury purchasing schemes aimed specifically at altering spot exchange. Furthermore, if you look at the US trade deficit, generally around 5% of GDP, you’ll see that the US is simply attempting to protect its own economic sovereignty. Bernanke is not the source of the problem. He is the aggressive US policy-maker who is attempting to shift the negative externalities of currency manipulation onto the manipulators, by exporting inflation and importing capital investment. Most of the currency manipulators are starting to come around, but Japan appears to be lost.

      • 0 avatar


    • 0 avatar

      What ‘American public’ do you know? The rubes of this country don’t even know what a Yen is, or what quantitative easing means, and think the expression ‘printing money’ literally means the government (not the Fed) is printing extra dollar bills (not issuing credit and buying government bonds). The American public is clueless about currency manipulation, but generally very happy when they see their 401k go up every day, even if they have no idea why.

      Anyways, I’ve been invested in Toyota and Japanese ETFs for the past month. Bring it on.

    • 0 avatar

      I have lived and worked around the world for most of my life. I have been personally impacted by the value of currencies, and I still are. A dollar from TTAC bought me 76 yen last year. Today, it gets me 102 yen. In that regard, I heartily endorse Ghosn’s opinions.

      Having lived and worked around the world, I noticed an oddity: In most countries, they look at their own currency, see it going up and down against other currencies, they say it buys more or less when going on a trip, or when going to a store to buy imported products.

      In America, people talk about the OTHER currencies, as if the dollar is cemented in place, and as if its the other countries that must be intentionally messing with the rates. This is misguided, and it fosters an environment in which jingoistic remarks such as those of Mulally can thrive. (Mulally is a smart guy. That part of his speech probably was not written by himself. It reads like the work of Steve Biegun, Ford’s silly vice president for international government affairs, and a former foreign policy adviser to Sarah Palin, not the brightest lamp on the international scene.)

      Currencies are going up and down against each other. They ALL move up and down against each other (unless pegged.) In the last two yeara, the dollar swung by 18 percent against a basket for foreign currencies.

      Likewise, you rarely hear a foreign automaker complain about the value of the dollar. They usually talk about their own currency. EU makers talk about the higher Euro making exports harder. Japanese automakers talk about their yen, how it nearly killed them and how finally, there is some relief. Nobody accuses the other countries of currency manipulation – that appears to be an American pastime. Sure, the ECB, the Fed, the BOJ, the PBoC all “manage” their currencies to some extent, it’s part of their job. To tar others as currency manipulators while doing just the same at home is disingenuous and stupid.

      Ford should and does know better. Ford conveniently forgets that it had a bastion in that allegedly closed market Japan. The bastion is called Mazda. Ford controlled and managed Mazda. Ford stayed out of the Japanese market only by name. A Ford Focus sold better in Japan when sold as a Mazda3. Ford sold Mazda after carmageddon, because it was one of the few things that still could be turned into cash. I sold a Park Ave apartment because I needed the cash. I won’t claim discrimination, just because I no longer can afford one.

      Mark Fields managed Mazda, he should know better. People deserve better, and should demand less nonsense. Ford usually is a straightforward and no-nonsense company. Biegun’s mudslinging makes them look ridiculous,

      • 0 avatar

        “This is misguided, and it fosters an environment in which jingoistic remarks such as those of Mulally can thrive.”

        Japan holds as much US debt as China. China was once considered the foremost authority on currency manipulation during the era of the peg, but now the foremost-currency-manipulator-title has fallen to Japan. No amount of ad hominem attacks against American culture can alter economic reality.

        Japan relies on a strong dollar to make their export economy work, thus, they rely on a strong US economy to back the US dollar. When the US and China squared off in the new millennium, and the US economy started to falter after 9-11, Japan declared that they were innocent bystanders. Rather than bolstering the US economy by working to improve terms of trade, which would have bolstered the dollar in turn, Japan chose to manipulate the dollar-yen exchange by purchasing treasuries.

        If the US were so inclined, it could reverse Japanese currency-manipulation by purchasing Japanese treasuries en masse, but then Japan would cease to exist, and you would learn about jingoism and currency manipulation the hard way. I think it would be better if you eased your propagandist bluster, and you examined the data and listened to reason.

  • avatar
    schmitt trigger

    On a lighter note;
    Ghosn must be one of the most expressive car CEOs anywhere. He is truly a man of a thousand faces, and much has been written about this trait here and everywhere.
    But has anyone noticed that his female translator has started acquiring that same trait?

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