Is a weak yen good for Japan’s economy?

Foreign money fluctuations have an effect on completely different populations in numerous methods.

Think about the latest decline of the yen, which slid from round ¥103 towards the greenback on the finish of 2020 to a multidecade low of round ¥151 in late 2023. The weak yen has compelled a few of my economist mates in Japan to cancel their analysis journeys to america as a result of their grants now fall far wanting journey bills. Then again, Japan’s tourism sector is booming as a visit to Tokyo has turn into a cut price.

This raises the query of whether or not a neighborhood foreign money’s appreciation or depreciation is extra fascinating for reinforcing macroeconomic efficiency. Within the case of Japan, an archipelago that’s closely depending on commerce, a stronger yen might be useful as a result of the phrases of commerce normally enhance because the foreign money’s worth rises. The identical quantity of exports would translate into extra imports.