Yen Weakens as Abenomics Receives G8 Blessing

Japanese yen is weaker today, losing ground as the G8 seems to approve the stimulus measures taken on by Japanese policymakers in an attempt to stimulate the economy. As a result, the yen is weakening today, dropping against its major counterparts.

Not too long ago, Japan started an aggressive easing process designed to increase the monetary base and stimulate the Japanese economy, which has been suffering from deflation for about 15 years. Concerns about this policy shift, named “Abenomics” for Prime Minister Shinzo Abe, have been largely ignored by the other members of the G8.
Some have brought up the possibility that Japan’s weak currency could upset global capital flows, since the move could increase Japan’s debt burden. Additionally, there are those that point out that Japan’s weak currency gives the country an edge in global trade.
Japanese policymakers continue to insist that these measures are more about economic stimulus, and not about trade, and this insistence is what allows the G8 countries to avoid castigating the Japanese for their methods. It will be interesting to see whether or not Abenomics will work to kickstart the Japanese economy.
At 13:34 GMT USD/JPY is up to 95.5800 from the open at 94.5070. EUR/JPY is up to 127.6505 from the open at 126.3250. GBP/JPY is up to 148.8905 from the open at 148.5750.

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