Japan: How Much Higher Will the Yen Go?

After suffering through a year's worth of Lehman shokku ("Lehman shock"), Japan is getting back on an even keel. The Japanese economy contracted at a double-digit pace between October and March but is growing again, rising an annualized 2.3% between April and June. The Nikkei 225 stock index has stabilized at around 10,000, almost 50% higher than the two-decade lows experienced in March. And while the business community has not greeted the new Democratic Party of Japan government with high expectations, so far Prime Minister Yukio Hatoyama has at least made no major missteps.

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