Growing household income providing solid business confidence in Japan – time to buy Yen as Bank of Japan closes on rate hike
Nancy Sensua
Jul. 1, 2007

The Japanese economy is getting ready to grow at a brisk rate, beating all other world economies including that in the emerging economies. It is expected that Japanese economy will be growing at the fastest pace by end of 2009. The growth will come from the domestic economy and growing household economy. The export sector will be in recession as the world economy will be in a slump.

Tankan, Japan's most closely watched business survey, showed confidence among large manufacturers was unchanged at 23 points in June from March and near December's two-year high of 25, the Bank of Japan said in Tokyo today. The result matched the median estimate of 26 economists surveyed by Bloomberg News. A positive number means optimists outnumber pessimists.

Sentiment among non-manufacturers held at a 15-year high of 22 points for a third quarter as the export-led expansion creates jobs and spurs consumer spending. The survey supports expectations that the bank will raise rates as soon as August.

It is time to go long on Yen. The Yen is in a long-term bull market. It can test 116 very fast against dollar. Over the long term Yen can go as low as 60 against the dollar.

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