Standard and Poor’s Rating Services outlines the history leading up to Japan’s current economic straits as well as the positive trickle-down effect it has on the remainder of Asia. Despite a recent resurgence, the power of the Yen has dropped dramatically against the US Dollar over the past five years. To combat a decline of nearly 30%, the Japanese Prime Minister Shinzo Abe has adopted a three-pronged approach in achieving a 2% inflation-target – a process which could take a few years. To drive the seriousness of this situation, S&P compares the demise of the Yen to the successful currencies of other Asian superpowers such as China, Singapore and Korea.
These financial effects trickle down to effect Japanese GDP through significant declines in annual imports and exports. Real-effective trade rates in Asia (adjusted for inflation) have grown aggressively since August of 2008 in all counties examined apart from Taiwan (remained stagnant) and Japan, which declined as rapidly as it rose nearly five years ago.
Potential investors will be particularly intrigued by the information regarding the immediate direction of the Japanese economy. Furthermore, they will want to see the analysis regarding the trends in Japanese portfolio purchases versus the International variety.
S&P’s comprehensive report is around 3,000 words long, contains half a dozen graphs, and is a valuable tool to everyone from the first time investor to the industry expert.
Purchase this report on the Weak Japanese Yen.
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