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The need for inflation in Japan’s weakening economy

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Ahead of the Bank of Japan Outlook Report on Tuesday 14 of October, Graham Martin, Managing Director of Optima Fund Management (Europe), comments on the need for inflation in Japan’s weakening economy…

With recent IMF growth projections down, the Japanese government and Central Bank are aligned in wanting to generate inflation in the domestic economy.  As we expect that the Central Bank will continue to weaken the currency, investors should continue to hedge exposure on their Japanese investments.

Japan’s economic outlook received the largest downgrade of any country, with its growth expected to fall to 0.9% for this year. Whilst Latin America and parts of continental Europe are experiencing similar problems, the UK and USA’s more positive outlook demonstrates the ‘multi-speed’ recovery that the IMF pointed towards. 

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