Weaker yen fuels economic optimism in Japan

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IANS/EFE | 21 May, 2013
The Japanese government Monday revised upward its evaluation of the economy given the weakness of the yen, which is helping to push exports and encouraging companies to increase production.

In its economic report for May, the cabinet raised its evaluation of three of the 14 categories it analyzes: exports, industrial production and profits.

In addition, it said that the economy "is moving forward little by little", adding that it expects this recovery to be "gradually supported by the improvement in confidence, the improvement in export conditions and the effect of the package of monetary policies".

The report comes after the yen has fallen about 30 percent in value since November against both the dollar and the euro.

The Tokyo stock exchange is currently in a euphoric state and the benchmark Nikkei index last week managed to exceed the 15,000-point barrier for the first time in more than five years.

Last month, the Bank of Japan announced a massive monetary-easing program aimed at doubling the monetary base in two years.

In its latest report, the government admits that the economy is still in a deflationary phase but that "signs of change can be seen in some areas recently".

Japan grew at a 3.5 percent clip in the first quarter relative to the same period last year, as Prime Minister Shinzo Abe's ambitious programme to combat deflation and revitalize the world's third-biggest economy began to yield results.