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May 19, 2013

Falling yen to make Japan’s goods more affordable

NORMAN — Attention, bargain-hunters around the world: Japanese goods — from cars to televisions — are going on sale.

Credit Japan’s drive to pump cash into its economy to stimulate growth. The extra money flooding its financial system is helping shrink the value of the yen. A U.S. dollar now buys about 100 yen. Last fall, it bought fewer than 80.

When the yen’s value falls, many Japanese goods become less expensive worldwide. Toyotas become cheaper in Germany, the United States and South Korea. So do Sony electronics. For tourists, Tokyo doesn’t cost so much to visit.

By contrast, goods made in Europe, Asia and the United States become pricier compared with Japanese products. And as sales of Japanese products grow, Japan’s economy benefits.

In the long run, economists say other nations gain, too. An economically stronger Japan means its consumers and businesses can afford to buy more goods from other countries, helping lift their economies, too.

Here’s how a cheaper yen will affect consumers, companies and investors worldwide:

Japanese cars and electronics:If you’re a customer of Honda, Toyota or Sony somewhere outside Japan, a falling yen is your best friend. It means Camrys, Accords and PlayStations will likely cost less. And once foreign sales are converted into yen, more revenue flows to Japanese manufacturers.

When Toyota sold a Camry in the United States for $30,000, those dollars were converted into roughly 2.4 million yen. Today, Toyota would get 3 million yen from such a sale — 25 percent more.

Tourism:Always dreamt of visiting Japan? It’s becoming more affordable.

Thanks to the yen’s fall beginning in late 2012, the number of visitors to Japan rose 18 percent in the first three months of 2013 to 2.3 million. Japan Tourism Agency officials say the dollar’s rise against the yen is a key reason.

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