Skip to main content

The Globe and Mail

How the U.S. is winning, and Japan losing, the ‘currency war’

A woman counts her U.S. dollar bills.


Société Générale has taken an interesting look at the "currency war" and found that the United States is winning.

It's not an all-out war, of course, and the United States will say it hasn't even fired a shot. It has only tried to juice its recovery through several rounds of quantitative easing, an asset-buying program that just happens to be greenback-negative.

Japan, on the other hand, is desperately trying to weaken its yen to help its exporters. But, as Société Générale's chief of foreign exchange, Kit Juckes, says, Tokyo is losing big time.

Story continues below advertisement

Mr. Juckes plotted the exports of the United States, Britain, Germany, Japan and France amid all the current talk about a currency war and moves by some countries to hold their currencies down.

Firstly, I put a chart of U.K. and U.S. exports to show how, in 2012, the U.K. lagged behind, as dependence on exporting to Europe hurt," Mr. Juckes said today.

"My argument was that the weak pound policy has sent up inflation and done relatively little to help exports and the result of the poor trade performance will be more sterling selling," he said in his report.

"So far, so silly and so sterling-negative."

Mr. Juckes then plotted Germany, and determined that the United States, by outpacing the engine of Europe's growth, is "winning the currency war," he said.

"Then I added Japan, and concluded Japan is losing the currency war in a really big way," Mr. Juckes said.

"And finally, I added a line on French exports to show how French exports are struggling. The U.K., on this basis, is doing a lot better than their nearest economic neighbour."

Story continues below advertisement

For his findings, see the accompanying infographic or click here.

Report an error Licensing Options
About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More


The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨