Yen's relentless slide revives Japan's interest in structural reforms
TOKYO - Japanese policymakers are turning their attention to more structural economic factors behind persistent yen declines, convinced that market intervention is limited in its ability to reverse the currency's broader slide.
Spear-headed by Japan's top currency diplomat Masato Kanda, the Ministry of Finance set up a panel of 20 academics and economists this year to drill into the country's current account for reasons behind the structural issues.During its four meetings since March, the panel discussed measures to strengthen Japan's global competitiveness and divert profits earned overseas to boost domestic growth, according to presentation materials and minutes released by the ministry.
Structural economic reform has remained the most elusive part of former Japanese Prime Minister Shinzo Abe's signature"Abenomics" strategy, launched a decade ago, as ultra-easy monetary policy kept uncompetitive companies alive. Trade no longer generates a surplus, reflecting a surge in the cost of energy imports and an increase in offshore production. Japanese manufacturers with overseas operations now produce roughly 40% of its goods outside the country, according to a survey by the trade ministry.
Daisuke Karakama, chief market economist at Mizuho Bank, estimates that only about a third of the 35 trillion yen in primary income surplus last year may have returned home.
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