German business is doing spectacularly well: the country is again the world's biggest exporter, profits are at a record, competitiveness has improved sharply (see article).Where Germany leads, the rest of Europe follows.
But in a happy confluence of policies, because the central bank promises to buy up the bonds that the government issues, interest rates are for now unlikely to soar out of control, while the weakening yen has created a surge in exporter profits, putting Japan in a policy sweet spot.
A lower yen has turbocharged exporters' profits.
The rise has accelerated an upward trend in the yen that was already squeezing Japanese exporters' profits.
A weak yen helps inflate the exporters' profits by increasing the value of overseas earnings when they are converted into the home currency.
Monday's data come after Japanese shares suffered their worst weekly drop for more than seven years last week, while a surging yen is eating into exporters' profits.
Agricultural exporters' profits in Peru are taxed (assuming they aren't off-shored, of course) at just 15%, half the national average paid by other industries.
It has surged by 40% against the yen since late 2012, which has pinched exporters' profits, since they compete against Japanese firms in electronics and carmaking, among other businesses.In response, the central bank cut its main interest rate twice last year.
Painted as a strategy to prevent a sharp and disorderly appreciation of the yen, the policy of selling yen and buying dollars has helped boost exporters' profits, on which much of the recent recovery has been based.
Fanned by the economic difficulties in other parts of the world, the currency's rise has made Japanese goods more expensive for shoppers abroad and has helped dent exporters' profits.
