For almost two decades, Japan’s economic fortunes have deteriorated, and little seemed to be done about it.
But in the last few months, the nation’s new prime minister, Shinzo Abe, has pushed policy makers and other officials to take bold steps to revive Japan, one of the world’s largest economies. Their handiwork was evident Friday when the yen hit 100 to the dollar for the first time in four years...
...While the weaker yen is good for Japanese exporters, it makes imported products more expensive. That in turn can make selling foreign goods there harder.
In a statement, the American Automotive Policy Council reacted strongly to the currency milestone. “The depth of Japanese currency manipulation has reached a new low,” said Matt Blunt, the council’s president. He said the yen’s weakening would cost the United States exports and jobs.
For Japan, what exporters do with their extra profits will be crucial in determining whether the wider economy gets a similar boost.
Recent data suggest that Japanese exporters are keeping the prices of their goods unchanged, preferring simply to expand profits instead of slashing prices to increase export volumes. (Even if they do nothing, exporters’ overseas earnings are worth more as the yen weakens).