The Yuan and Yen Need the Fed’s Help. They Might Not Get It.
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The Yuan and Yen Need the Fed’s Help. They Might Not Get It.

Being a loose monetary policy outlier is an uncomfortable place to be these days

By JACKY WONG
Wed, Sep 20, 2023 9:46amGrey Clock 3 min

All eyes are on the Federal Reserve meeting this week. Central bankers at Asia’s two largest economies will be paying extra attention.

The Chinese yuan and Japanese yen are both hovering at their lowest levels against the dollar in more than a decade. The yuan has lost 13% versus the dollar since the beginning of 2022 while the yen has dropped 22%.

Both countries are grappling with weakening currencies—but their economies are in quite different situations. China must ward off deflation as its real estate implosion continues to weigh on industry and consumer sentiment. Japan, on the other hand, is contending with its highest inflation in decades.

Yet there are some important similarities too. Both countries’ central banks have pursued relatively loose monetary policies as growth challenges have mounted—in contrast with most other developed economies, which have been raising rates rapidly. China has been cutting interest rates and the amount of cash banks must hold in reserve to juice up its economy. Japan is hesitant to give up its longstanding policy of targeting ultra low interest rates in fear that the country could eventually slip back into deflation or near-deflation, too—a problem it wrestled with for years in the wake of its own burst asset bubble in the 1990s.

Widening interest rate differentials with the U.S. have put both currencies under pressure. Yields on Japan’s 10-year government bonds are 3.6 percentage points lower than on U.S. equivalents. The difference between Chinese and U.S. bonds is 1.7 points.

Both currencies have nonetheless staged a modest rebound from their lows lately. The People’s Bank of China warned speculators not to bet against the yuan earlier this month. Around the same time, Bank of Japan Gov. Kazuo Ueda told domestic media that an end to the BOJ’s negative rate policy could be in the cards if its 2% inflation target is sustained.

The risk of capital outflows probably makes China uneasy. It saw net outflows pick up to $42 billion in August, the fastest pace since 2016, according to Goldman Sachs. Given the country’s semi-closed capital account, there are many tools it can employ to slow the pace of depreciation. Borrowing costs for the offshore yuan have gone up, which could deter some short-term speculators.

Yet ultimately, economic fundamentals—and monetary policy—will still drive the yuan’s trend. While the Fed looks likely to pause its rate increases, a stronger-than-expected economy could keep U.S. rates higher for longer. To stabilise its economy, China will likely need more monetary and fiscal stimulus than has been unveiled so far—meaning an even higher interest rate differential and probably, higher imports once fiscal stimulus starts to kick in. Both of those will tend to weigh on the currency, especially if U.S. rates stay parked at their current high level in 2024.

In Japan, meanwhile, the central bank looks likely to tighten eventually as it becomes more confident that inflation—at a low level—has become more baked into households’ expectations. Japan’s core inflation, which excludes fresh food, has stayed above the central bank’s 2% target for more than a year already. Japan’s 10-year government bond yields rose to their highest level since 2014 recently.

China and Japan’s plunging currencies may chart different paths going forward—especially since the yen is already down so far against the dollar over the past two years. But they could both use an assist from the Fed, which may not be forthcoming for quite a while.



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Is ‘Rizz’ the Secret to Getting Ahead at Work?

Whether you call it charisma, charm or magnetism, some people seem like naturals. Good news: It can be learned.

By Rachel Feintzeig
Mon, Jul 22, 2024 4 min

Great leaders have it. Gen Z has a new word for it. Can the rest of us learn it?

Charisma—or rizz , as current teenage slang has anointed it—can feel like an ephemeral gift some are just born with. The chosen among us network and chitchat, exuding warmth as they effortlessly hold court. Then there’s everyone else, agonising over exclamation points in email drafts and internally replaying that joke they made in the meeting, wondering if it hit.

“Well, this is awkward,” Mike Rizzo, the head of a community for marketing operations professionals, says of rizz being crowned 2023 word of the year by the publisher of the Oxford English Dictionary. It’s so close to his last name, but so far from how he sees himself. He sometimes gets sweaty palms before hosting webinars.

Who could blame us for obsessing over charisma, or lack thereof? It can lubricate social interactions, win us friends, and score promotions . It’s also possible to cultivate, assures Charles Duhigg, the author of a book about people he dubs super communicators.

At its heart, charisma isn’t about some grand performance. It’s a state we elicit in other people, Duhigg says. It’s about fostering connection and making our conversation partners feel they’re the charming—or interesting or funny—ones.

The key is to ask deeper, though not prying, questions that invite meaningful and revealing responses, Duhigg says. And match the other person’s vibes. Maybe they want to talk about emotions, the joy they felt watching their kid graduate from high school last weekend. Or maybe they’re just after straight-up logistics and want you to quickly tell them exactly how the team is going to turn around that presentation by tomorrow.

You might be hired into a company for your skill set, Duhigg says, but your ability to communicate and earn people’s trust propels you up the ladder: “That is leadership.”

Approachable and relatable

In reporting this column, I was surprised to hear many executives and professionals I find breezily confident and pleasantly chatty confess it wasn’t something that came naturally. They had to work on it.

Dave MacLennan , who served as chief executive of agricultural giant Cargill for nearly a decade, started by leaning into a nickname: DMac, first bestowed upon him in a C-suite meeting where half the executives were named Dave.

He liked the informality of it. The further he ascended up the corporate hierarchy, the more he strove to be approachable and relatable.

Employees “need a reason to follow you,” he says. “One of the reasons they’re going to follow you is that they feel they know you.”

He makes a point to remember the details and dates of people’s lives, such as colleagues’ birthdays. After making his acquaintance, in a meeting years ago at The Wall Street Journal’s offices, I was shocked to receive an email from his address months later. Subject line: You , a heading so compelling I still recall it. He went on to say he remembered I was due with my first child any day now and just wanted to say good luck.

“So many people say, ‘Oh, I don’t have a good memory for that,’” he says. Prioritise remembering, making notes on your phone if you need, he says.

Now a board member and an executive coach, MacLennan sent hundreds of handwritten notes during his tenure. He’d reach out to midlevel managers who’d just gotten a promotion, or engineers who showed him around meat-processing plants. He’d pen words of thanks or congratulations. And he’d address the envelopes himself.

“Your handwriting is a very personal thing about you,” he says. “Think about it. Twenty seconds. It makes such an impact.”

Everyone’s important

Doling out your charm selectively will backfire, says Carla Harris , a Morgan Stanley executive. She chats up the woman cleaning the office, the receptionist at her doctor’s, the guy waiting alongside her for the elevator.

“Don’t be confused,” she tells young bankers. Executive assistants are often the most powerful people in the building, and you never know how someone can help—or hurt—you down the line.

Harris once spent a year mentoring a junior worker in another department, not expecting anything in return. One day, Harris randomly mentioned she faced an uphill battle in meeting with a new client. Oh!, the 24-year-old said. Turns out, the client was her friend. She made the call right there, setting up Harris for a work win.

In the office, stop staring at your phone, Harris advises, and notice the people around you. Ask for their names. Push yourself to start a conversation with three random people every day.

Charisma for introverts

You can’t will yourself to be a bubbly extrovert, but you can find your own brand of charisma, says Vanessa Van Edwards, a communications trainer and author of a book about charismatic communication.

For introverted clients, she recommends using nonverbal cues. A slow triple nod shows people you’re listening. Placing your hands in the steeple position, together and facing up, denotes that you’re calm and present.

Try coming up with one question you’re known for. Not a canned, hokey ice-breaker, but something casual and simple that reflects your actual interests. One of her clients, a bookish executive struggling with uncomfortable, halting starts to his meetings, began kicking things off by asking “Reading anything good?”

Embracing your stumbles

Charisma starts with confidence. It’s not that captivating people don’t occasionally mispronounce a word or spill their coffee, says Henna Pryor, who wrote a book about embracing awkwardness at work. They just have a faster comeback rate than the rest of us. They call out the stumble instead of trying to hide it, make a small joke, and move on.

Being perfectly polished all the time is not only exhausting, it’s impossible. We know this, which is why appearing flawless can come off as fake. We like people who seem human, Pryor says.

Our most admired colleagues are often the ones who are good at their jobs and can laugh at themselves too, who occasionally trip or flub just like us.

“It creates this little moment of warmth,” she says, “that we actually find almost like a relief.”

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

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