Japan has fallen into a recession due to the weak yen. It seems to be a lie that until just a few years ago, Japan was suffering from a “recession due to the appreciation of the yen.” Market participants are of the view that the weak yen trend will continue for the time being. Personally, I think that once the yen weakens, the trend will continue. Isn’t the yen depreciating abnormally, as if the abnormal appreciation of the yen, which once fluctuated to the 70 yen level to the dollar, was reversed? The 200 yen range to the dollar is by no means an exaggeration.
The exchange rate is proportional to the national power of the country. Looking at the current situation in Japan, it will never fall below 100 yen to the dollar. Around 120 yen seems appropriate. The current depreciation of the yen is excessive, but to be honest, there are almost no factors in Japan that could cause the yen to appreciate. If that is the case, there is no choice but to manage the economy by maximizing the advantages of the weaker yen.

If the yen weakens, take advantage of the weaker yen, and if the yen rises, take advantage of the stronger yen. Such flexible economic management will become increasingly important in the future. In other words, it is “muscular economic management.”

The Japanese consumer market, on the other hand, is tricky. Personal consumption was sluggish even when the yen was strong, but when the yen weakened, there was a qualitative change, but there was no change in the basic trend. What is clear is that there are no products or services that Japanese consumers “absolutely want”. There is no way to boost the consumer market other than creating novel and attractive products and services. (Kei Kitajima)