Investor Presentaiton
NOMURA
Disadvantages of a cheaper Japan
USD/JPY and JPY effective exchange rates
(USD/JPY)
70
(2010 average=100)
160
120
170
220
270
USDJPY (LHA)
JPY nominal effective exchange rate (RHA)
JPY real effective exchange rate (RHA)
140
120
100
80
00
60
60
40
40
20
20
0
320
73 77
81
85
89 93 97 01 05 09 13 17
21 (CY)
With the end of the pandemic, the addressing
of issues if low wages and low wage growth is
becoming ever more urgent.
As inflation accelerates in the world economy
and the Japanese yen starts to depreciate
following the normalization of monetary policy
and rise of rates in overseas markets, the
discrepancies of price levels between Japan
and overseas grows more apparent.
This means a growing risk that we Japanese
residents may one day face price discrepancies
and suddenly realize a significant loss in the
yen's purchasing power. This may also be a
reason why the discussion on 'cheap Japan'
and 'cheaper yen' is becoming more and more
popular.
Source: Nomura, based on BOJ data
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