By: Mike Campbell
Yukio Hatomaya, of the Democratic Party of Japan (DPJ), took office yesterday as prime minister of the world’s second largest economy, ending 50 years of rule by the Liberal Democratic Party of Japan. Hatomaya inherits leadership of a country with a rapidly ageing society and in the midst of the worst economic recession in the history of modern Japan. His party was elected on a mandate of change, the exact nature of which remains to be defined. The DPJ have promised social security increases and there is talk of adopting a more assertive posture with the USA, but the devil is in the detail.
On the foreign currency markets, little change was evident in the value of the Yen. It lost ground against the Euro, yesterday, but has been oscillating in value for months now. The gradual trend seems to be downwards against the Euro and the pound, but it is still worth almost 40% more than it was before the global recession hit. The Yen closed lower yesterday at 133.26 to the Euro; it was up, marginally at 150.25 to the UK Pound Sterling and closed lower at 91.205 against the US Dollar.
On the other side of the Pacific, the Federal Reserve Chairman, Ben Bernanke, announced that the US recession was over. Probably. Speaking at the Brookings Institute to a Washington “think-tank” he stated that "From a technical perspective, the recession is very likely over." However, he cautioned that Americans worried about job security would feel that the economy was “very weak” for some time to come. The speech was largely the same as one he delivered last month – if Wall Street was listening to the Chairman, they weren’t convinced as stocks closed slightly lower yesterday. The recession will end; they always do. The only question is when, exactly.