http://www.reuters.com/article/2013/04/04/us-japan-economy-boj-idUSBRE93216U20130404
Japan's central bank has planned an unprecedented stimulus package over the next two years as a gamble to stabilize and expand a stagnating economy. The stimulus is the largest in the history of the country and so far, reactions have been good. The stock markets rose and the Japanese Yen fell in value, as desired by policymakers. They hope to use this situation to meet the inflation target of 2% and weaken the Yen to strengthen exports and make Japan more competitive in world markets.
This spells potentially good news for a lot of other economies in the world as they will receive Japanese goods at relatively lower costs which is desirable for consumers. In addition, a stabilized Japan represents valuable trade prospects. While initial projections appear good, it remains to be seen how the stimulus will play out over the coming years.
Japan's central bank has planned an unprecedented stimulus package over the next two years as a gamble to stabilize and expand a stagnating economy. The stimulus is the largest in the history of the country and so far, reactions have been good. The stock markets rose and the Japanese Yen fell in value, as desired by policymakers. They hope to use this situation to meet the inflation target of 2% and weaken the Yen to strengthen exports and make Japan more competitive in world markets.
This spells potentially good news for a lot of other economies in the world as they will receive Japanese goods at relatively lower costs which is desirable for consumers. In addition, a stabilized Japan represents valuable trade prospects. While initial projections appear good, it remains to be seen how the stimulus will play out over the coming years.
I think Japan needs to produce more output that has high price elasticity of demand so that the depreciation in Yen can grow their export revenues exponentially
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