Discussion

OPINION: Japan Drops the ‘M’ Bomb on Hawaii

Play
Listen to this Article
1 minute
Loading Audio... Article will play after ad...
Playing in :00
A
A
A

It’s been a busy week in East Asian news, with North Korea’s cartoon-esque leader hogging most of the spotlight (not difficult, given his girth).

While he may not share his father’s penchant for wearing high heels, the DPRK’s “Morning Star King” has still been trying ever-so-hard to appear taller, mouthing off threats daily of thermonuclear war.

Concerning? Of course. But Jong Un’s overcompensations are overshadowing what may be the most significant (and potentially chaotic) development to hit Asia in years.

Japan is going ballistic.

ARTICLE CONTINUES BELOW AD
ARTICLE CONTINUES BELOW AD

Not with nuclear warheads, mind you (though the results are intercontinental).

Instead, the country just dropped a huge money-bomb in the Pacific, with Hawaii directly within the blast radius.

After more than a decade of stagnation, Japan’s new leadership decided the best way to boost economic growth would be to thoroughly nuke their country’s currency.

Japan's new Prime Minister, Shinzo Abe, has embarked on major economic reforms.

Japan’s new Prime Minister, Shinzo Abe, has embarked on major economic reforms.

ARTICLE CONTINUES BELOW AD

They reckon that by driving down the yen’s value and making Japanese goods cheaper, they’ll benefit from an export-led recovery as Americans and others scoop up suddenly-discounted cars, TVs and more.

To achieve this, the Bank of Japan recently announced it would begin gobbling up bonds, stocks and even real estate in a money-expansion that could be triple in size to that which our own Federal Reserve undertook after the ’08 financial crisis.

‘Mo money, less value, goes the logic.

ARTICLE CONTINUES BELOW AD

And indeed the massive move has sent the yen plummeting, losing around 7% of its value in the last three days alone. That means American goods and services (including those here in Hawaii) are now around 20% more expensive for the Japanese than they were in September of 2012.

Honolulu, we have a problem.

Whether or not Japan’s not-so-little experiment manages to jump-start its economy, making Hawaii more expensive to the Japanese could end up causing some near-term turbulence for our visitor industry.

Sponsored Content

Subscribe to our Newsletter

Stay in-the-know with daily or weekly
headlines delivered straight to your inbox.
Cancel
×

Comments

This comments section is a public community forum for the purpose of free expression. Although Big Island Now encourages respectful communication only, some content may be considered offensive. Please view at your own discretion. View Comments