Asian Currency Decoupling
By contrast, he points out that the currencies of Asia's other 3 big economies, Japan, South Korea and India is up only a few percent since the end of the strict peg. Indeed, in all of these cases, their currencies have actually fallen in recent months, with the South Korean won being down 12.1% since its October 31, 2007 peak of 903.2 versus the U.S. dollar, the Japanese yen being down 9% since its March 18 peak of 98.23 versus the U.S. dollar and the Indian rupeeh being down 8.9% since its November 9, 2007 peak of 39.11 versus the U.S. dollar. By contrast, the yuan is up 3% since Mid-March and more than 8% since early November.
Although exporters will not like this assessment, China's currency trend is much sounder than those of the other 3 big Asian economies as it will help contain inflation and reduce the excess reliance on net exports. The problem is instead that the trend movement isn't fast enough, even though it at least in the right direction. The more recent currency movements will by contrast be problematic for Japan, South Korea and India as it will make the problems of inflation and/or excess external surpluses worse.