JHMM - Weekly Market Pulse: Be Careful What You Wish For
2024-04-30 09:00:00 ET
Summary
- The aim of the devaluation was to escape deflation which had persisted since (at least) the turn of the century.
- The Yen started to weaken in 2021 as the BOJ ramped up Yen printing again to help the economy recover from the COVID shock.
- Mortgage rates have moved back above 7%, but that didn’t stop new home sales and pending home sales from rising in March.
Be careful what you wish for lest it come true! – Various of Aesop’s Fables
Shinzo Abe was elected to a second term as Japanese Prime Minister in 2012 and launched his three arrows plan to revive the Japanese economy. The three arrows were:
- Ultra-loose monetary policy, a de facto policy to weaken the Yen
- Fiscal policy – increased government spending
- Structural reforms at the corporate level