It was called endaka — a Japanese term for currency strength that sapped the economy — and reversing it was supposed to help end deflation and stoke growth. Parts of the recipe aren’t coming out as advertised.
Less than two years since Prime Minister Shinzo Abe took office and championed policies that drove the yen down 16 percent against the dollar, more than a decade of entrenched deflation is in the rear-view mirror.
More elusive is an invigoration of manufacturing, sparking concern the rise in Japan’s cost base from a weaker yen has made it less competitive, rather than more. The evidence is puzzling central bankers and cabinet members, and raises the stakes for Abe’s domestic growth strategy.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.