May 11, 2013 in Business

‘Abenomics’ driving Japanese economy

Country see benefits from weaker currency
Malcolm Foster And Elaine Kurtenbach Associated Press
 

TOKYO – The dollar soared above 100 yen for the first time in more than four years Friday, driven by aggressive credit-easing aimed at reviving Japan’s sluggish economy and improved U.S. economic figures.

The U.S. dollar rose as high as 101.30 yen, the first time since April 2009 it has traded above 100 yen.

The weaker yen is a boon to Japan’s major auto and electronics exporters. The government said the yen’s fall signaled that Prime Minister Shinzo Abe’s policy mix of increased public spending and aggressive monetary easing, dubbed “Abenomics,” was proving successful. Kick-starting the economy has been Abe’s top priority since he took office late last year.

“With Abenomics, we hope that the Japanese economy will grow and can contribute to the global economy,” said Yoshihide Suga, the chief Cabinet spokesman. “It’s better that stocks are high than low. We believe this is a sign that our policies are progressing well.”

Japan’s Nikkei 225 stock average jumped 2.9 percent to 14,607.54, its highest close since January 2008.

The central bank’s monetary easing, and expectations it will help reverse persistent deflation, have helped drive the value of the yen down by more than 20 percent against the dollar since October, when it was trading at around 78 yen.

The yen’s sustained fall has riled some of Japan’s trading partners but generally won support from leaders of other major economies eager to see the world’s third-biggest economy recover from two decades of stagnation. Abe has pushed both fiscal and monetary stimulus strategies to help Japan end a long bout of deflation and support domestic demand.

Japan’s long robust trade surpluses have turned to deficits in the past two years, after demand for imports of oil and gas rose due to the closure of nuclear power plants following the March 2011 tsunami.

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