http://www.bloomberg.com/news/2013-04-14/japan-hearing-calls-from-u-s-to-europe-not-to-drive-down-yen.html
The U.S. and Europe are not happy with Japan's effort to create devaluation in order to defeat deflation. The U.S. officials endorsed Japan's recovery efforts but have voiced their concerns with Japanese officials targeting weaker yen. Bank of Japan's governor stated that central bank did everything possible to defeat deflation. Similar measures have been taken by the central banks in Europe and the United States and therefore and proved to be successful in achieving the goalsset by Japan.
It is understandable that other nations would not agree with Japan's move if they believe it to be for the purposes of competitive devaluation since that will hurt their exports. However, it is good for consumers in those countries since they will receive Japanese goods cheaper.
ReplyDeleteIt does seem to be the case, though, that Japan's main motivation here is to defeat deflationary pressures in the economy. This is a particularly urgent priority for them since the Yen has been deflationary for many years now and for Japan to truly improve its economy, they must meet a reasonable level of inflation. It remains to be seen whether this stimulus will work as they desire.