Here’s the problem with Abenomics

July 24, 2013
July 24, 2013
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Fresh signs that the Abenomics plan to weaken the yen is helping shore up the Japanese exports arrived Tuesday. The yen value of exports jumped 7.4% in June versus the prior year, thanks to shipments of cars to Europe and the U.S. and rebounding trade with China.

Unfortunately, the yen value of imports surged 11.8% as the energy hungry country’s fossil fuel imports—which are priced in US dollars—also jumped thank to the weak yen. June marked the country’s twelfth-straight trade deficit, thought it was noticeably smaller than other recent monthly imbalances.

An for what it’s worth, a rise in the price of imported goods might not be unwelcome for policy makers, who are trying jolt Japan out of a decades-long flirtation with deflation.

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