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Rise in exports demand pushes Industrial Production up in Japan – Bank of Japan ready to make a move
Marla Guthrie
May 28, 2007
The Japanese economy is rebounding handsomely – thanks to Bank of Japan’s low interest rates. Rise in exports demand pushes Industrial Production up in Japan. It is not only the unemployment and consumer spending, but also the rise in export demands, which are making Bank of Japan consider raising the rates in Japan. Japanese bonds are falling, and the Yen is getting ready for a massive bullish run on the market.
Interestingly, as Yen appreciates in the next several months, the Bank of Japan may not intervene this time. There are indirect pressures from the EU and US that the Yen must be allowed to rise although there is no pressure on the time frame.
The Japanese economy faced a massive deflation and disinflation phase for the last twenty years from excessive borrowing by the public and private sectors.
Through the coarse of the last year, the economy has shown sign of life and some inflation. Bank of Japan has resisted the demand for higher rates so far, eager to get the economy out of recession and deflation. Japan is on the verge of rapid economic growth and reflation. It may be that the second largest economy in the world will lead the world economic expansion taking the lead away from emerging countries and America.
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