“It seems that the government’s policies have fueled expectations and the yen weakened more than we intended in the move to around 90 from 78,” Japanese Finance Minister Taro Aso said Friday.
According to the Finance Minister of Japan, the Yen has weakened more than intended since the fall of 2012. The problem with his statement is that the government of Japan is getting set up to take further measures to continue to to weaken the Yen!
With the new BOJ government stepping in later this year, it’s very possible that they will be on the same page as Abe when it comes to weakening the Yen. The question is, how weak does Abe want the Yen? 100? 110?
According to Reuters, “Abe, while campaigning for an election last year, repeatedly said his economic policy had three arrows: monetary policy easing, fiscal spending and structural reforms to increase competitiveness.”
Increasing competitiveness has a lot to do with weakening the Yen. As the Yen is weakened, Japan’s export dominated economy can then thrive. It’s very likely were going to see a weaker Yen in the next few months, especially with the new BOJ government coming into power.
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