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Shaking up Japan: Bold, or plain reckless?

Economist Original article ›

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Reforms planned by the administration of prime minister, Naoto Kan. Plans to raise the consumption tax, to make changes to social security, and to commit Japan to join the Trans Pacific Partnership. Japan's business community supports the plan to join the free trade community called the Trans Pacific Partnership. This group consists of USA, Australia, New Zealand, Singapore, Malaysia, Peru, Chile. South Korea has signed free trade agreements with the USA and the EU, and Japanese business does not want to be left behind.

The new administration of Naoto Kan in Japan.

02/24/2010

A new administration committed to reverse decades of heavy public spending and issuance of debt to finance it. Public debt at $9.7 trillon is bout twice the national GNP. Kan assumed the prime ministers position when Hatoyama resigned, after only 8 months in office.

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The Japanese economy and the rising yen in 2010-2012

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The yen reached 86 yen to the dollar by August 2010. Chinese government accumulation of Japanese bonds was amajor factor in the yen's rise in 2010. By August 2011 the yen experienced a new surge going up to 78 yen to the U.S. dollar resulting in intervention by the Bank of Japan in currency markets. Investor flight to safe havens such as the Swiss Franc and the Japanese yen with the debt crisis in the U.S. and the Eurozone. The impact on export markets. The newly elected LDP government of Shinzo took strong action to reverse this and improve export competitiveness in 2013.

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