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Japan’s Economy Shrinks Unexpectedly, Hit by a Weak Yen and Rising Inflation


Economists say the fall can be attributed to the Bank of Japan’s decision to keep interest rates low. The difference in rates that has opened as the United States has repeatedly raised its own, experts say, has driven a sell-off of the yen as investors pile into the dollar in search of higher returns.The cheap yen has had some benefits for Japanese exporters, whose products are less expensive for customers abroad, as well as for other Japanese companies with large overseas earnings and investments.But the pluses seem to have been outweighed by the stress put on domestic markets as businesses and consumers alike have had to pay more for imports, whether raw materials or finished goods.The yen’s weakness has created record trade deficits for Japan. The value of imports sur …

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