Japan Not Boosted Much by Weaker Yen


Despite statistics illustrating a surprise trade surplus in recent weeks (as noted in NACM eNews), the mood of the Japanese manufacturer improved only a little in the last few weeks as the Bank of Japan managed to blast the yen back to some measure of respectability. However, by all accounts, the reprieve will be short-lived, and the yen will start to ramp up again.

The dollar is not showing any signs of rebounding despite the fact the largely positive economic data of late. The euro is in the tank, and there it shall stay. The yen is still the chosen refuge of some global currency traders, and that will become manifest in the weeks ahead. The exporters know they are living on borrowed time.

The Japanese export dependence still is a drag on the economy, but it is very hard to break that pattern. Japan  simply lacks the aggressive consumer on which the United States can depend. The domestic economy will not jumpstart the Japanese, and it rarely has. The major hope in Japan still rests on the recovery of the U.S. consumer and their appetite for the goods that Japanese companies still manufacture better than the Chinese.

Chris Kuehl, PhD, NACM economist
 

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