By James McKee
After Japan experienced the earthquake and tsunami which ultimately resulted in a nuclear disaster the production fallout is becoming apparent as well. Durable goods in the United States such as electronics are on a steep declined as Japan attempts to rebuild, and unfortunately this has not been an easy process. The sale of goods within the US has declined dramatically and as a result the USD will slump on the online forex exchange once the official numbers are released. Any news of a poor economy will always cause a slump in the value of the hosting economy’s currency, and to date the USD has been suffering greatly.
The only reason the USD has not fallen off the charts completely is that the Euro has been having its own troubles lately. With regard to a continued amount of trouble there is little chance that production will resume any time soon. There is a continued measure of fear where Japanese production (or lack thereof) is concerned, and in all likelihood it will continue to be a problem for some time to come. There needs to alternatives sought out or an international effort to restore the production capacity of Japan.
The United States is not the only country that has become dependent on Japan; other economic powerhouses such as China are importing large amounts of goods from the country as well. Despite Japan’s small size they are the world’s second largest economy, and as such they have a huge impact on the day-to-day functioning of that economy. There has to be regard for this reality, because otherwise the world is facing very real consequences where the production of many different goods is concerned. There must be a comprehensive plan in place to either restore Japanese production or emulate that production in other countries.
The progress of Japan’s ability to produce these goods again is going to impact not only the stock and currency markets, it is also going to effect the commodities market as well. There is sure to be a drop in the value of gold and other precious metals used in the production of electronics and a variety of other goods. Such a drop would cause gold futures to drop as well, and any private parties who have invested in gold will notice a temporary drop in the value of their holdings. The world needs to come together and help Japan through this difficult time as much as possible.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the online forex trading regularly.
