By Mark Cudmore, Bloomberg Markets Live reporter and strategist
Germany’s economic output surpassed Japan’s in 2023, for the first time in more than 50 years. This was in a year when Germany’s economy shrunk, which just shows how Japan’s rapidly declining relevance is all about the currency impact. Or at least the most recent leg is.
In reality, it’s been a two-way, self-feeding process: The yen has been depreciating in recent years for valid fundamental reasons precisely because Japan’s economy has stagnated for much of the past three decades. The bill for tolerating zombie corporates and a massive debt pile is being delivered, and it’s the currency that is being forced to pay.
