Isn't the issue with the yen more about Japan's lack of productivity growth (both services and goods). If the economy had real potential we would see money coming in to take advantage of the fall in cost to buy Japanese assets. The fact that Japanese companies are not very efficiently run (from a financial perspective -- no debt on the b/s -- piles of cash on the b/s...) and don't produce above market returns keeps buyers away even at the lower prices. I don't have access to an ROE figure for the TOPIX, but I'm guessing it is still quite low...

Japan also has very poor demographics. There sill is no immigration and a birth rate the assures the country of a shrinking population.

I think any short term pain associated with food and energy prices is a reasonable price to pay for the decades of decay that needs to be reversed. Japan needs to rebuild/restart all the nuclear plants. They need to face the music and use one frequency (60 Hz) across the entire country. They need to focus on growing larger quantities of food and not having tiny "high quality" producers -- it is crazy that you can't sell a cucumber in Japan if it is too curved! I don't recall seeing a single large scale farm in my years living in and visiting Japan.

Expand full comment

I couldn’t find the chart referenced by the line referring to 1998 cataclysm

Expand full comment