New Japanese Prime Mister Shinzo Abe has pushed the Yen down 15% against the dollar since 10/12 because of his insistence that the Bank of Japan create inflation by pumping more money into the economy. Moreover, the new Abe appointed Governor of the BoJ will enthusiastically embrace this new policy, unlike the outgoing Governor. Another reason why it’s happening, Japan is running trade deficits and a weaker yen boosts exports.
Tag Archives: currency wars
Currency Wars?
Declaring the Yen’s rise to be a threat to the economy the Bank of Japan massively intervened in the foreign exchange market to drive down its value. The Swiss did the same thing and now so are the Turks! I bet these interventions will become more common because expansionary fiscal policy is in deep hibernation and because it helps boost exports. But, will the race to debase ignite currency wars?