SIGHTS FOR SORE EYES

Japan, the economy the world forgot, might be coming back

Japan just hit two milestones it hasn’t seen in a while.

Most visibily, the Nikkei 225 index closed above the 20,000 level for the first time this century and is up more than 15% this year.

Nikkei-225-stock-index-Data_chartbuilder

But the country’s trade surplus has also returned, last seen in 2012 and at its highest level since 2011.

Japan_trade_balance_Trade_balance_chartbuilder (1)

Both occurrences are tied up in the Bank of Japan’s battle to stimulate the economy through a massive bond-buying program that’s pushing the yen to its weakest level in years.

The_weakening_yen_Japanese_yen_effective_exchange_rate_Japanese_yen_value_in_US_dollars_chartbuilder

And while that’s been good for big multinational companies—Toyota is expecting record profits this year—consumers haven’t been as lucky.

toyota_motor_corp._net_income_jpy_billion_chartbuilder__1_

The weak yen saddles consumers with with higher costs on imported goods. So the trade surplus is the result of a puissant export sector overpowering shrinking demand for imports in an economy just stumbling out of a recession.

Japan_trade_in_yen_terms,_annual_change_Exports_Imports_chartbuilder

 

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