| ManusJustus said: It just means their economy is doing better. Yeah, it hurts exports, but its still a situation I would rather be in. |
I don't think it has much to do with their economy. The rapid devaluation of the Western Currencies is mostly down to a lack of faith in stability (Euro and closely related currencies - like the GBP), and massive money-print outs to help "stimulate" the economies (all Western currencies - particularly the dollar).
All that needs to be happening for Japan is that the demand for the Yen needs to be recessing at a slower rate than the supply - neither of those would suggest that the economy is doing "better".
I'm not an expert on the Japanese economy, or what-have-you, but I'm guessing what's happening is that the Japanese Government has borrowed a lot from Japanese banks, and now the banks are questioning whether or not Japan can repay (what with all the deteriotating economic conditions), as a result of this, the Japanese banks are no longer lending money - essentially restricting the money supply. This has resulted in both the deflation we have been seeing, and the rally of the Yen (which would have been pushed a lot by spectators after it started hitting the media). The BoJ have started printing money to try and solve the situation... should have short term relief on currency value, though, price levels? I'm not sure which way that would go.
