Why Currency Wars Matter for Emerging Markets
A probable answer from one of the politicians participating on G20 meeting : "War, what currency war? The thing that is going on for last 2 years? That is not war, that is just making job for printing shops" 
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This weekend’s G20meeting was supposed to shed light on the state of the so-called currency war–but instead its members acted as though one didn’t exist. Real or imagined, however, emerging-market investors ignore FX at their own risks.
Talk of currency wars have been heating up since Shinzo Abe became Japan’s prime minister, after running a campaign predicated on bringing rising prices to a nation that has suffered from near-non-stop deflation during the past 20 years. His election caused the yen to drop 20% versus the dollar–and weaken against Asian currencies like the Korean won, on the hope that Japan would follow in the footsteps of the U.S., England and Europe, by using unconventional measures to try to stimulate the economy and boost inflation.
Some argue that these measures are legitimate attempts to boost economies that have yet to fully recover from the Great Recession–and I’m sympathetic with this camp. No one wants a repeat of 1937, when the U.S. hike interest rates too soon and cause the economy to crumble. It didn’t fully recovered until World War II. Keeping interest low–and taking unconventional steps to when rates can’t go any lower–is a justified response to a crisis unlike most of us have ever seen.
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