Cryptocurrency Might Go Legit in Japan
The Guardian reported this morning that bitcoin is getting some extra attention in Japan this year. The Liberal Democratic Party, the current governing political party in Japan, has announced that part of the party platform will be the legitimizing of various cryptocurrencies in Japan’s legal system. Part of the incentive for this is the ability for Japan’s government to tax the currency, but they’re also looking to add some extra growth to their economy. If they become one of the first countries to change the legal definition of cryptocurrencies like bitcoin from a “commodity” to a “legal currency”, Japan could become the center of regulated cryptocurrency exchange and regulation; sparking investment in the infrastructure required to facilitate exchanges and international monitoring.
European Union Debate in UK Hammers GBP
Just as Trump has tapped into anger among the electorate here in the United States, isolationist fervor in the UK is prompting a potential Brexit from the European Union. The UK’s Prime Minister, David Cameron, prefers the country remain a member of the EU, but 2/3 of his own conservative party supports parting ways. The impact of a potential Brexit would send shockwaves through forex markets as the pound becomes slightly less stable. Periods of great political transition have a direct impact on the perceived stability of a currency tied to the state in turmoil.
It’s expected that the UK will hold a referendum in September of this year to decide whether the country will remain a member of the EU. GBP exchange rates are tremoring already, partly because of international uncertainty, but the national debate over EU standing certainly plays its own role.
Yen Even More Volatile in Shaky Forex Market
Bloomberg Business reports that the trends in implied volatility for the next three months indicate the yen is even more unstable than the GBP. This is shocking considering the raging debate in the UK over their place in the EU, but understandable considering the fact that the UK’s vote on remaining in the EU is beyond the three-month horizon of current implied variability figures.
Factors impacting currency exchanges include: expected upcoming damage to GBP associated with the Brexit, big banks causing fear in Europe, oil continuing to slide in price per barrel, and a 10 percent slide in global stock value. China’s economy is still hitting the brakes more than the accelerator, and the US economy isn’t exactly skyrocketing back into pre-recession territory, although it is certainly hobbling its way back to a healthier position.
A Good Morning on the Street
On a brighter note, the US economy is continuing on a path to better health. Search trends show that from all online classified ads listings, it is obvious that Americans are searching less for jobs. Such trends correlate to the figures, as unemployment dipped under 5% in January. Amazon (O:AMZN) is up $1.10 this morning, partly based on a new marketing campaign by the cloud computing giant to woo banks to utilize their cloud instead of expensive in-house infrastructures. Home Depot (N:HD) is another winner this morning as it manages to knock Lowe's (N:LOW) down a peg or two.