Bearish Yen Equals Bullish Future for Toyota, Japanese Exporters
NEW YORK (TheStreet) -- Toyota
Currency manipulation by Tokyo has certainly played a major role in helping the auto makers as well as such exporters as Sony
When Prime Minister Shinzo Abe entered office in 2012, his strategy for economic growth, dubbed "Abenomics," focused on weakening the yen through the massive purchase of bonds by the Bank of Japan. That is much like the Federal Reserve's quantitative easing. Basic economics at work: The more supply without increasing demand, in this case the yen, the less it is worth over time. It has obviously worked for the Japanese yen.
The recent policies of the Federal Reserve have also helped the Greenback rise against the yen.
Around the time the Fed decided to reduce its quantitative easing last week, the Bank of Japan voted unanimously at its a two-day meeting to maintain its current level of easing, making for a bullish future for Japanese exporters.
About the effects of the declining value of the island nation's currency, Governor Haruhiko Kuroda, the governor of the Bank of Japan, stated after the vote, "The correction of an excessively strong yen has been a plus for Japan's economy."