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MRB's Insight of the Week: Japan has a mountain to climb to defeat deflation
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by Warren Smith on Nov 01, 2013 at 00:01
Japan has a long way to go if it truly wants to boost competitiveness, reverse deflation expectations and rekindle investment and hiring; a cheap yen is needed to increase the odds of success.
We expect a weaker yen and stronger export growth. This, in turn, will spur higher relative earnings and further outperformance of Japanese equities. MRB remains long Japan in a global equity portfolio, while recommending a hedge against a weaker yen.
Warren C Smith is a partner at MRB - The Macro Research Board