Tags: Rogers | yen | Abe | Japan

Jim Rogers: Yen's 'Collapse Very Dangerous'

Wednesday, 22 May 2013 10:51 AM

By Dan Weil

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The dollar hit a four-year high of 103.31 yen Friday, and legendary investor Jim Rogers, chairman of Rogers Holdings, doesn't think that's a good thing.

"The [yen], which is one of the major currencies of the world, has collapsed 27 percent in no time," Rogers told Yahoo. "It's a very, very dangerous move."

The dollar has gained 25 percent against the yen since Dec. 4, trading early Wednesday at 102.99 yen

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The yen has dropped as Japan's Prime Minister Shinzo Abe has pursued fiscal stimulus and appointed a central bank governor willing to implement a massive easing program.

"[Abenomics] has made the stock market go up quite a lot, it's been dramatic, but it's made the currency collapse," Rogers explained.

The Nikkei 225 Stock Index has jumped nearly 80 percent over the last year, and Rogers says he's not going to "jump on the bus."

"I still own Japanese shares, I sold some last week, not all, but some," he noted.

"If [Japanese equities] drop down for some reason conceivably I would buy them back, but I don't know what would make them go down though because there's money printing everywhere. ... This is causing stock markets around the world to be very artificially inflated."

Some experts think the injection of monetary and fiscal stimulus is exactly what Japan's economy needs. "This is Japan's best chance in 20 years to escape from its deflationary mind-set," Hajime Takata, chief economist at Mizuho Research Institute in Tokyo, told The New York Times.

Rogers disagrees. "I know the government is reporting that [the yen's] move is good, but I don't trust governments," he said.

"One hundred twenty-five million Japanese [stand to lose the most] because of inflation. Everything Japan imports is going to go up dramatically in price. ... The Japanese will suffer, but ... stockbrokers will do better, currency traders will do better."

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