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Article: Japan Should Have Turned Itself Around Six Years Ago
- Article from:
- International Herald Tribune
- Article date:
- June 17, 1998
- Author:
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Gregory Clark
International Herald Tribune
06-17-1998
As the yen continues to fall, experts worldwide say it is due to severe loss of confidence in the Japanese economy. In Japan, the experts say it is Nippon uri, or the selling out of Japan. But the main reason, surely, is the extraordinary situation surrounding interest rates in Japan.
With the official discount rate stuck at 0.5 percent, and many depositors in Japan getting less than 1 percent interest for their money, it was inevitable that they would eventually begin to look abroad. When they did, it was inevitable that the yen would begin to weaken.
Anyone who keeps his money in yen is losing not just the interest spread but also the ...