DECLINE OF YEN POSITIVE FOR REST OF ASIA FOR NOW, SAYS S&P

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June 10, 2013

SINGAPORE - The Japanese yen decline of the past few months should be positive for the rest of Asia, at least at the macro level, according to ratings agency Standard & Poor's, which says that, because most of the economies in the region are net importers from Japan, a weaker yen means cheaper imports. Net exporters to Japan, however, will lose out. "Although the recent steep decline in the yen has negative connotations for neighbouring economies' export competitiveness, we view the recent weakness of the yen as retracing the sharp gains seen during the depths of the 2008 global financial crisis," says Paul Gruenwald, S&P Asia-Pacific Chief Economist. "During the financial crisis, the yen appreciated sharply due to its status as a safe haven currency."