The Painful Side Of Japan's "Growth Strategy"

Following last night's 'surprising' upward GDP revisions, Japan's trade balance plunged to near-record deficit levels (but that didn't matter) and while China's trade data is questionable at best (and now proven 'false'), Japan is facing a much more considerable worry at home. Abenomics' goal to reduce the value of the JPY to improve competitiveness and spur a renaissance has had a rather nasty side-effect for all the Japanese people who eat, drive, or in any way use energy. The cost of Japan's crude basket has risen 35% in the last six months and is now at its highest for the domestic energy user since 2008 (which sparked the last collapse into deflation). As Bloomberg notes in this brief clip, this surge is not related to demand or the price of oil, but to the devaluation of the Japanese currency and leaves both the refiner crushed on margins and the consumer more cash-strapped.