Japanese Prime Minister Shinzo Abe’s limping “Abenomics” revival programme suffered a fresh blow on Friday when Britain’s vote to leave the European Union sent the yen soaring and threatened to make companies and consumers even more cautious.
The ‘Vote Leave’ campaign claimed unexpected victory over its ‘Britain Stronger in Europe’ rival, after 52 percent of Britons voted to support their plan to leave the 28-nation club.
Abe took office in December 2012 pledging to end decades of deflation in Japan and generate growth in an economy plagued by a shrinking, fast-ageing population with a mix of hyper-easy monetary policy, fiscal spending and reforms.
But the formula has largely failed. The central bank’s aggressive money-printing has failed to accelerate inflation, and anaemic economic growth has discouraged firms from raising wages and households from spending.
“In terms of Abenomics, it was already dead in the water. This will certainly sink it a bit further,” said Jeffrey Kingston, director of Asia studies at Temple University’s Japan campus.
The yen, seen as a safe-haven currency, soared briefly above 100 to the dollar, prompting Finance Minister Taro Aso to signal a readiness to intervene to stem excessive strength.
via Reuters
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Latest posts by Alfonso Esparza (see all)
- Market Rally Still Going Low Holiday Volumes Awaiting Start of 2020 - 27 December 2019
- Market Awaits China Retaliation on Trade - 29 November 2019
- Alibaba to Close Order Book Ahead of Huge IPO - 18 November 2019