Japan still doesn't get it!
|TOKYO (AP) -- Japan's new finance minister is wasting little time making waves, jolting the foreign exchange market Thursday by calling for a weaker yen as doubts surface about his ability to guide a recovery in the world's No. 2 economy.|
In unusually explicit remarks for a Japanese finance minister, Naoto Kan vowed to work closely with the central bank to steer the currency toward an "appropriate" level around 95 yen to the dollar.
He welcomed the yen's recent retreat from the 14-year high of 84.83 to the dollar hit in November but indicated it hadn't fallen far enough. "I hope currency markets correct themselves further, weakening the yen," he said.
Trying to export your way to prosperity in a world that is no longer on a gold standard is dumb! All you do is lower the standard of living of your citizens.
Weakening the yen involves deficit spending. That spending would be used in a far better way, with greater results, if the Japanese government spent on goods and services and on policies that would increase domestic wages.
This is a dumb strategy, but you know what? I am a forex trader, so I don't care. I am short the yen. I advise you do the same!