Depreciation of the yen
The latest data proves that the US labor market continues to improve. A lot of American companies currently enjoy better performance. It has accelerated a trend of dollar-buying and yen-selling without doubt. Back in Japan, It is against domestic demand-oriented industries which import raw materials and fuels in large quantity. On the other hand, manufacturing companies which process imported materials and export value-added goods have been increasing profits with help of increasing export competitiveness, a product of weakening yen.
Business hates uncertainty. No one can deny that wild fluctuations in the exchange rate have negative impact on corporate management. It is extremely important to pay attention to stability in the market rather than move in currencies. It is true that the recent stock market price rise supports business picking up, but it is not the end of the story. It is necessary for the government to implement necessary policies so that people can feel improvements in the real economy. More precisely, PM Abe needs to release his third arrow economic policy: a growth strategy and put it into action immediately. Otherwise, signs of economic recovery visible on a boarder front will not develop into a sustainable growth of the Japanese economy.
Visit to the Middle East
The second visit to the Middle East with PM Abe produced fruit. The Japan-Saudi Arabia investment agreement was made. A joint statement on the strengthening of the comprehensive partnership between Japan and Saudi Arabia was released. The convention between Japan and the United Arab Emirates (UAE) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income was concluded. The agreement between the governments of Japan and the UAE for cooperation in the peaceful uses of nuclear energy was signed. The agreement between Japan and Turkey for cooperation in the use of nuclear energy for peaceful purposes was also signed.
During our stay in Ankara、the Japan-Turkey Joint Economic Committee Meeting took place. An economic partnership agreement (EPA) between Japan and Turkey was a center of discussion. The business community of the two countries reconfirmed the importance of an early conclusion of the EPA, hoping the both governments will work harder towards the goal.