Is the weaker yen doing more harm than good?

The weaker yen hasn’t resulted in the hoped-for improvement in export competitiveness. It has boosted corporate profits, but the pass-through to business investment has been weaker than usual. Meanwhile, yen weakness has contributed to price rises that have undermined household incomes and so hurt consumption. Overall then, yen weakness has so far undermined rather than boosted demand. Still, this isn’t reason to write off the Bank of Japan’s policy approach.