A weak yen is beneficial to Japan's economy if the movements are not too abrupt and stable – Japan’s Kuroda

While commenting on the Bank of Japan’s (BOJ) Governor, Haruhiko Kuroda said that, "If movements are not too abrupt and stable, then the weak yen currency proves to be optimistic for Japan’s economy."

June 06, 2022 - 01:24 PM 253 views

5.	A weak yen is beneficial to Japan's economy if the movements are not too abrupt and stable – Japan’s Kuroda

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© 5. A weak yen is beneficial to Japan's economy if the movements are not too abrupt and stable – Japan’s Kuroda

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While commenting on the Bank of Japan’s (BOJ) Governor, Haruhiko Kuroda said that, "If movements are not too abrupt and stable, then the weak yen currency proves to be optimistic for Japan’s economy."

Key Quotes

The underlying view of central banks is that monetary easing should be managed unless cost-push inflation causes second-round consequences such as increased inflation expectations and wage growth.

The impact of a weak yen varies depending on the industry and size of the company.

It is critical for currency rates to fluctuate steadily in response to economic and financial factors.

What matters is that enterprises that benefitted from the weakening of the yen raise capex, wages, and strengthen the positive economic cycle.

Smaller, service-sector businesses in regional Japan will benefit from the resumption of inbound tourism.

The Market Reaction

When last seen, the USD/JPY currency pair was trading at 130.57, falling by 0.22% in a day.

 

 

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