How long can the Japan index last ?Looking at the recent YEN hitting 150 against the USD is worrying. By staying in ultra low interest rate (negative) and a depreciating currency - would this really trigger the consumer spending the BOJ wants to see ?
With weaker yen, it makes import more expensive (ie. more yen required to buy US products for example) and the suppliers have to pass on these costs to the consumers. Wages growth are stagnant as employers are not expanding their business as much as they want to be.
It is indeed a worrying sign that the Central Government need to come together and put forth a strategy to pull the country out of this financial doldrum. The ultra loose monetary policy has been going on since 2013 at that point the YEN was still at 75 against the dollar. Fast forward to today, it has doubled in almost 10 years.............
