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A weaker yen lifts the profits of multinational companies while cutting the real purchasing power of Japanese households.
Bank of Japan Deputy Governor Himino said both things at once, which is the point: the distributional tradeoff of yen depreciation now has formal acknowledgment from inside the central bank.
The case for yen weakness runs through the corporate earnings channel.
When multinationals generate revenue in foreign currencies and convert it back into yen, a depreciated exchange rate widens the margin on that conversion. The profit effect is mechanical and immediate.
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