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Raising Interest in Japan February 21, 2007

Posted by David in Japan, North-East Asia.

In the West, when the average person thinks of the Land of the Rising Sun, not much comes to mind except the typical stereotypes, myths, a few cultural aspects, and an extra-ordinary amount of absolute BS about the society in general (Usually from returning English Teachers or just plain idiots).

Other-than-that, not much consideration is given to Japan, its role on the international stage, and how its general welfare can have a direct effect on all types of people throughout the world.

As the world’s second largest economy, Japan plays a key role in the over-all health of the global economy. Therefore, keeping that in mind, what’s good for Japan is good for the world. Which is why, learning that “Japan’s central bank has raised interest rates to 0.5%” is welcome news. Their economy is improving day by day.

According to a 21-02-2007 BBC News article, the decision to raise the rate was made because of the “steady growth in the economy”, and the fact that “Japan’s recovery was likely to continue.”

However, although the rate hike lifted borrowing costs, it was “not enough to interrupt the huge but potentially volatile flow of cheap yen out of Japan that now helps prop up global stock and real estate markets.” (International Herald Tribune 21-02-2007).

“The flow, known as the yen carry trade, is the product of the yawning gap between Japan’s rock-bottom borrowing rates and the much higher rates in other countries.” It also serves as an example of Japan’s importance to the world economy.

Think of the mess that would be created if that trade was to suddenly stop.

There are many other examples that demonstrate how and why Japan is such an important player in the world. But to list them here would take too long.

However, I would ask you to consider the following, in another BBC News story (21-02-2007) it was reported that during US Vice-President Dick Cheney’s recent talks with Japanese leaders, Japan was praised as “one of America’s closest allies”. It was also stated that their alliance was for “Asia and for the world”.

I couldn’t agree more. Especially, when the words are coming from the biggest player around. In fact, I would go so far as to say Japan is the USA’s greatest ally.

Obviously I am not an expert on Japan (and my writing skills are limited) but I think it’s important that we get to know more about this particular country, and not just the old war stories, manga, or crazy TV shows. People like Shingen are a great source of information on all sorts of Japan-related matters, and there are tons of reading material out-there.

Go read.



1. Shingen - February 26, 2007

Why thank you, sir. I do my best. Like you, I believe Japan cannot be ignored, just because it’s next to its rising neighbour, China. I directly experience this ignorance through my studies, and that is what I want to use my time to overcome.

With people such as you and me, we’re on the right tracks. I also think that with the manga wave, things might pick up in a few years time once those people begin moving out of school and college and bring their enthusiasm with them… so long as they can get beyond their starting point.

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