Poor Japan!

I find it interesting that as soon as the yen depreciates, other countries start whining. As Lars mentioned in his latest post, now it´s Korea that´s moaning! What everyone seems to forget is that for the past 40 years the yen has appreciated strongly against all currencies.

The chart below shows the won/yen exchange rate since 1990. The won has depreciated 185% relative to the yen!


The “impossibility” of a yen depreciation has been an important factor behind Japan´s stagnation over the past 20 years (see here). Now that Mr. Abe is giving indications that it wants to revert Japan´s deflationary spiral, everyone goes Oh, no!

As Lars has shown, Korea´s recovery from the crisis has stalled. Lately, it´s nominal spending has begun to distance itself from the pre-crisis trend.


On the other hand, Japan´s nominal spending is far below the pre-crisis “flat” trend! It would be surprising if no one in Japan felt bothered about this.



5 thoughts on “Poor Japan!

  1. It seems fitting to mention that the book Currency Wars is the only one ahead of Market Monetarism on the Amazon monetary bestseller list today…

  2. Pingback: Poor Japan! | Kenjikatsuragi's Blog

  3. It is always puzzling when some nations criticize other nations for their monetary policies. The United States, or a Japan, must follow a monetary policy that is best domestically.

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