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A weak yen won’t beat a strong yuan

Something truly strange is occurring in Tokyo as the yen falls to its lowest level in five years: no one is rejoicing. For 25 years now, Japan has maintained a rather developing nation view of exchange rates.

A succession of governments worked 24/7 to weaken the yen to support exports. It’s been an obsession for elected officials and those at the Ministry of Finance (MOF) and Bank of Japan (BOJ).

In fact, it became such an obsession that 1997-1999 vice-minister of finance Eisuke Sakakibara was celebrated in the mainstream media as “Mr Yen.” So was his successor, Haruhiko Kuroda.

In 2013, then-prime minister Shinzo Abe named Kuroda BOJ governor so he could turbocharge his weak-yen skills. It was something he had some experience in.