Like a lot of other countries around the world at the moment, Japan is finding that the rise of their currency against the American dollar is in fact a mixed blessing. The advancing Yen that is at a 14 year high against the American dollar is very concerning to Japan’s export led recovery.
Concerned comments suggest that Japan is on the verge of stepping into financial markets for the first time in several years. This is due to the fact that they, like a lot of other countries worldwide, have suffered through their worst postwar recession and the advancing currency against American dollars is in fact causing the kind of deflationary pressure that will drive the import costs lower for that country.
The Japanese finance minister also said that intervention in the markets is a distinct possibility because the manufacturing sector of the Japanese economy is in fact considering shifting its base to offshore production because the cost is too high home in Japan.
The move to intervene in the markets would not be taken lightly and is something that Japan hasn’t done since 2004 when they sold a record number of Yen.