In Japan's case, it is almost two decades' worth of negligible or no economic growth!
And Now, while the economy is sinking, Japan's currency is skyrocketing. While at face value it may seem like a good thing, the rising yen is spelling doom for Japan's crucial export sector.
What is the yen doing to Japan's manufacturing sector? Well, it's just killing it.
According to a number of government-sponsored surveys, about 40% of Japanese manufacturers fear that, unless the yen stops rising, they might be forced to shift their production lines abroad where labor and facilities are cheaper at least.
Is there anything that can stop the yen?
Not much, other than pulling together a massive government stimulus package together with
similar in size and intention stimulus packages from other central banks.
Before the yen started its new rise to infamy, Japan had considerable trade surpluses and one of the highest domestic savings rates in the world. That made the country one of the few remaining providers of real capital in the world, not just printed paper money.
As a result, during the recession of 2008/2009, Japan's currency, along with the Swiss franc and the greenback, was considered a safe haven, to which many investors flocked.
Even the Chinese have started diversifying away from U.S. bonds and have been stocking up on Japanese bonds.
What on earth is pushing the yen so high all of a sudden?
Japan is getting older and fewer babies are born into that part of the world. At the same time, Japan is exporting more, because the domestic demand is shrinking. Adding to the pile is Japan's hoarding of
foreign assets, including bonds and equities, although recently Japan started repatriating some of the capital back into Japan.
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