War Currency Begins

China says it will conduct a currency war increasingly discordant. This is in contrast to the efforts of some major countries are voicing dissatisfaction with the decline in the exchange rate of the Japanese currency has fallen sharply against major currencies in the world.

Authority Bamboo Curtain country speechless silence over the weakening yen. Apparently, Beijing has taken its own measures to prevent a large pressure on the yuan to appreciate the yen.

China's yuan, also known as the renminbi, fell on Thursday to their lowest level since late December. In fact, the yuan edging down since January 14 when it climbed to a record high against the U.S. dollar at 6.21. Central Bank of China, as it claims to intervene in the foreign exchange market to keep the yuan rise.

"Obviously this is disappointing for those looking for a strengthening of the yuan," the value of Sean Callow, currency markets strategist at Westpac Bank, Sydney.

"Yuan exchange rate will tighten, possibly due to decreased yen, South Korean won and the Taiwan dollar decline," he continued. The exchange rate of the won fell 2.5% against the dollar since early 2013, while the Taiwan dollar retreated 2%.

Because many investors are chasing yuan, it is difficult for Chinese authorities to let the renminbi float freely according to market mechanisms.

Keep in mind, since the beginning of the year is usually the value of the yen rose weakened against all major currencies. The details, down 10% against the U.S. dollar and the euro amid growing expectations of aggressive monetary policy as an effort to revive Japan's weak economy.

Policy makers in Europe and Asia, especially South Korea complained of rapid depreciation of the yen this.

Parang currency, the yuan the most difficult to predict

Against these circumstances, analysts read that a currency war is underway in which the central banks of developed countries deliberately intervened to weaken their currencies so that the value of exports and imports remain competitive.

To be considered, generally, the Bank of China set the mid-point each day to peg the yuan exchange rate. Typically, when the dollar fell against major currencies, the yuan remains strong. However, these conditions have not occurred in the last two weeks as the dollar has weakened against the euro.

Previously, analysts had predicted that the yuan's appreciation this year aims to reflect China's economic recovery.

A Reuters poll released this week shows 29 analysts expect the yuan to strengthen to 6.15 per dollar in January 2014. That means there is a gain of about 1.3% from current levels around 6.23.

Certainly very slow appreciation of the yuan if Beijing tightened its grip on the yuan further.

"Yuan exchange rate is one of the most difficult to predict because many of the assumptions about the decision the People's Bank of China (PBOC), which are not presented in general," commentator David David Greene, senior corporate FX dealer Western Union Business Solutions in Sydney.

According to him, the Japanese currency depreciation latter will indeed invite the rapid reaction of the Central Bank of China.