Noriko Hama, an economics professor at Doshisha University in Kyoto says that USD/JPY should be trading at 50 now and that Abenomics may cause a plunge in the yen and JGB’s in the future.
“The Bank of Japan is no longer functioning as a proper central bank. The scariest scenario, and the one we should be most wary of, is a bottomless crash in the yen, as the global financial community loses faith in the currency”
She blames Abe’s over reliance on fiscal and monetary easing to beat re-inflate the economy and says that the policies are a throwback to an era of export-driven economic growth underwritten by a weak yen.
“Once the dollar’s excessive valuation is corrected, the world will regain balance, with Japan as a pre-eminent exporter country,”
Full story from Bloomers here (h/t reader Xin)
She’s got half a point in that the real progress that needs to be made is domestically and getting the big business players in Japan investing in more than JGB’s.
