Japanese leaders believe that a weak currency is key to growth.
Japanese news agency Nikkei surveys about 145 top executives each quarter to gauge the mood on the economy. The good news for Japan is that respondents are far more upbeat. Almost 75% say the economy is expanding (although modestly), that's up massively from 40% in the December survey.
The usual suspects showed up on the list of the reasons why. About 37% cited a stronger US economy and 29% noted lower energy prices but the majority -- 52% -- cited the 'well-established weak-yen trend.'
FX weakness is quickly becoming to tonic for every weak economy. Whether currencies are as important as executives believe or not probably doesn't even matter at this point because in the 2015 economy, executives are the real leaders and the politicians are pandering populists. If Japanese CEOs think a soft currency is boosting their stock prices then it won't be long before others think the same and politicians everywhere will be along for the ride.
Nikkei 225 vs Japanese yen (inverted)
How many executive bonuses have been paid out for better stock performance because of pure FX devaluation? What's easier, building a better business or lobbying the government to weaken the currency?
