The JPY has been on a downward slide since the new Prime Minister Shinzo Abe came into office. He is a widely known advocate of “unlimited easing” and he criticized the Bank of Japan (BoJ) for not doing enough to help Japan get out of its deflation cycle. More pointedly, he wants the JPY to weaken further in order to help the export-reliant Japanese economy.
He wants to double the BoJ’s inflation target of 1%. So, we should expect Shinzo Abe to continue pressing his monetary easing policies.
You may also refer to my answer to “Question from Ken: Do you expect the Liberal Democratic Party of Japan regaining power will cause the USDJPY to move higher or pull back?” dated 27 December 2012.
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