Falling Yen’s Effect On International Currencies

Reuters reported that Japanese currency’s continuous deflation affecting other Asian country’s currency value, import and export trade.

The continuous falling of Japanese yen makes Asian countries such as South Korea, India and Indonesia’s economies uncompetitive which might cause currency war. Other countries let their currencies go down in order to support their own economies.

Currency war is also known as competitive devaluation, is a condition wherein countries compete against each other in order to achieve low exchange rate for their own currency.

The word war gives us the notion about something negative. But in fact, currency war has a lot of advantages. Japanese yen’s continuous devaluing forces other countries to lower their exchange rates. This is because lower exchange rates would mean cheaper products and high export rates, and more competitive exports means more transactions. In order to have exports, other countries devalue their currencies too. This happens because of Economic pressure.

Exporters have benefited from the effect of falling yen, but such benefits that are only enjoyed by larger exporters, such as automakers. It is widely expected that this matter will help to boost the economy by making Japanese products cheaper overseas. However, smaller firms could suffer because they have to pay more for imported materials.

Prolonged currency war would not give a relative advantage to the countries but will help in developing stability in the world money supply. Expansion of worldwide money supply and low interest rate would mean more consumption, more investment, and more international trade.

Like any other wars, this also has downsides. No country would gain real profit from the export trades. This is because countries lower their currency values just to be in line and to be able to compete with other countries’ value. Also, one of the hardest problems that might come up during this stage is the need to print more money. Devaluing currencies would mean that there is no enough supply of money in order to control the economy.

Some experts compare this situation with what happen with Asian currency crisis in 1997. During that time, yen was devaluing; there were highly uncompetitive exchange rates, and current account deficits. However, Asian countries have higher currency reserves compared with 1997 currency war, making it easier for Asia to cope with weaker currencies.

India and Thailand are making their efforts to lower down their rates while South Korea still lacks tools to push their won down like yen.

According to Gaurav Saroliya, a macro strategist at London-based Lombard Street Research, a lot of these countries are facing a double whammy of poor exports because of a very uncompetitive exchange rate.

Neurofinance and the Risk Mindset

Increasingly the findings from neuroscience are being applied to the world of finance. This is not surprising as neuroscience has plenty to contribute to our understanding of the decision-making process and the financial decisions we make are among the most important.

Expanding our understanding of financial decision-making and how to develop a ‘risk mindset’ can help protect organisations against the type of market booms and busts that plague economies around the world.

Improving financial decision-making

Poor financial decision-making can be damaging at both a personal and a professional level – creating stress in the home and insecurity at work.

Unsurprisingly, low financial literacy levels are a major contributing factor to this; but our own understanding of how we make decisions also affects our decision-making.

Most of us believe that we are able to keep our emotions in check; that we are able to put feelings, emotions, and memories to one side and just base our financial decisions on the cold hard data – the numbers.

Neuroscience has shown us that the brain doesn’t work like that. In fact, our emotions play an important role in decision-making. Consider an occasion when you have been resolute in a decision, but been persuaded otherwise after a talk with a friend, colleague, or family member; emotional reasons often force this change of mind.

When this tendency to make emotional decisions is combined with an increasingly complex financial landscape, where the number of choices for financial products and services is mind-boggling, we begin to understand the risks involved.

Financial service companies need to improve the literacy of their customers. In the past there has been a sense that financial organisations have a vested interest in keeping everything vague and complex, unintelligible to all but a few. But the winning organisations of the future will be educators that simplify their products and services for customers, and raise financial literacy levels.

Recent insights from behavioural economics and neuroscience can assist with designing financial products and marketing campaigns that promote better understanding for customers and employees, encouraging better financial advice, and improving the likelihood of a good financial decision being made.

Developing a ‘risk mindset’

Ensuring that the right financial products are sold to the right people, for the right reasons, and that customers fully understand what they are purchasing, requires a ‘risk mindset’.

This is becoming more necessary as financial regulations become tighter around the world, and financial organisations start to repair the image problems they have experienced in recent years.

But it takes more than just paying ‘lip service’ to regulations; it is about bringing real value to the customer experience.

With the aid of neuroscience and a better understanding of the decision-making process, organisations can:

Create a culture where the ‘regulator’ mindset is adopted in a constructive way, using principles that underlie the regulation rather than just blindly following the letter of the law.
Re-design incentive schemes less likely to result in mis-selling
Develop structured processes and a common language that all areas of the organisation can use to focus on the customer
Adapt existing products and services to have a positive impact on the customer experience
Foster collaboration and change between and within traditional organisational ‘silos’

The Guide to Use an ATM Machine

Since the dawn of the ATM (automated teller machines), banking has never been simpler. An automated teller machine, or ATM, provides one the convenience to make quick and prompt cash withdrawals. However, the purpose of the ATM does not end there, various other banking transactions, such as depositing money, transfer of funds and balance inquiries and account updates are possible via ATM machines. Since, the system saves, time and reduces delays, banks have ATMs located inside, outside or at various convenient and accessible locations, like gas stations, grocery stores and malls, so on.

There are a few things to consider before using an ATM,

Verify the network logos: These logos may be located in the ATM or debit cards, are indicative of the acceptable banking consortium. This means the ATM machine will have a list of acceptable logos posted on it. Even though many cards are universally acceptable these days, there is a charge on using the card in other bank ATMs after a number of withdrawals.

Be Vigilant: The use of debit card at ATM machines should be done under complete care, make sure no onlooker can see the PIN designated to provide access to your account.

These machines are easy to operate and provide systematic guidance to the users, the steps involved in using an ATM.

Step 1: Select the appropriate bank ATM.

Step 2: Insert your ATM card in the designated slot or swipe the card depending on the machine.

Step 3: Select the language that you desire for the user interface, most machines offer English and regional languages to choose.

Step 4: Enter the PIN (Personal Identification Number) provided along with the ATM card at the time of registration. Make sure you memorize the PIN and never disclose the same to a stranger or even acquaintance, to avoid the risk of card fraud.

Step 5: Select from the given transactions. Generally, the options are available at most ATMs, such as withdraw, deposit, balance inquiry and transfer. If you choose to withdraw, the ATM prompts for the amount, which once entered the ATM checks the balance of the account, and renders the cash if feasible.

Step 6: The machine prompts for printed receipt, which will be provided if you opt for the same.

Step 7: One can choose to continue with more transactions or finish the same.

Make sure to remove your ATM card, if it is inserted at the beginning of the transaction, without fail.

The common dilemma when using the ATM, is forgetting the PIN, the ATM machine allows only a number of attempts before confiscating the card. If one forgets the PIN, should request for the same at the issuing bank. Many fall victim to card frauds by not being vigilant and careful when transacting at ATM machines, be aware of your surroundings and keep the bank ATM card safe. The ATM provides a world of ease and accessibility to the users, by its easy, instantaneous and safe process.

Roles and Responsibilities of An Ethnic Moderator

In recent times, a focus group has emerged as the most powerful technique to collect authentic details from the representatives of a market targeted by a company. Ethnic group research is also a part of the extensive marketing research. Any marketing research group, whether it features a larger concentration of respondents from ethnic communities or not, is guided by an expert moderator.

Ethnic Group & Its Moderator

An ethnic group moderator can offer valuable insights of how to encourage the participating candidates from the ethnic groups to speak their mind without any discomfort. The moderator conducting a marketing discussion needs to be more experienced and skilled at handling such groups. The person should have a clear idea of the customs, cultures, social values and ethics about the groups that will be involved in the discussion. Such discussions are arranged in order to elicit reliable details from the members taking part.

The set of questions should be prepared in such a way that it does not hurt religious or cultural sentiments of the respondents, and they can feel more comfortable to express themselves.

Objectives of Ethnic Focus Groups

A moderator works on behalf of a focus group services providing company that is, in turn, hired by other companies who are interested to know the opinions and suggestions of the potential audiences in regards to different products, services, brand as well as concepts. A marketing research company is usually not a bigger one, comprising only 8-10 people,carefully chosen from the target customers on the basis of commonality of experience.

An ethnic group has the members who share some common features in respect of social, religious, cultural or historical background. The members in the group can identify each other on the basis of their language, native country, culture, dress codes, cuisines, customs or any commonality of experience. These people are considered to be representing their communities, so their views help the companies understand what those ethnic groups think about the products/services or if they have anything to say regarding improvement of any particular product/service.

The groups members are encouraged to reveal their own views and share opinions with other members in the same group. The ideas are expressed and exchanged in a descriptive way. Such group discussions inspire the respondents to give a free reign to their thoughts and opinions.

Function of a Moderator

An ethnic moderator is just like a fulcrum of the group, who is in charge of conducting the discussion. He or she chooses the topic after consultingwith the company and prepares the guidelines to be followed by every member in the ethnic group.

An ethnic moderator will set the time within which the discussion must be complete. He or she must inform the participants about the rules and topic of the discussion. They should also give equal opportunity to let everyone speak. Charm, persona and skill of a moderator play important roles in creating an ambience that makes every respondent feel comfortable and they can easily express their ideas.

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