Economist: The weakening yen over the past year has been a net drag on Japan's economy.

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Gold Finance reported that on July 8, Keiji Kanda, an economist at Daiwa Institute of Research, stated that over the past year, every 10% depreciation of the yen against the U.S. dollar has resulted in a net drag of approximately 0.14 percentage points on Japan's real GDP growth. While a weaker yen typically boosts growth through inbound consumption and stock wealth effects, these benefits are concentrated among tourism-related businesses and high-asset elderly households. Conversely, rising import costs impose a heavy burden on most businesses and households, while factors such as price pass-through, Middle East tensions, Trump tariffs, and a decline in the number of Chinese tourists have suppressed the typical positive effects of a weaker yen. The yen is currently still near historical lows against the U.S. dollar, hovering around 162.20.
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