Japan’s Aggressive Stimulus Plan Aimed at Economic Recovery image

Japan has an aggressive plan to take the region out of a long slump by increasing consumer prices and encouraging borrowing.

Similar to the US Federal Reserve’s strategy, Japan’s central bank will try to bring more money to the financial system, a far-reaching step aimed at making companies and consumers borrow and spend. This strategy will also decrease the yen’s value, as a cheaper currency will make Japanese products less costly for foreign markets.

GM CEO Dan Akerson said that Japan central bank’s strategy will offer domestic automakers a price advantage over the US automaker in the States. He added that although currency changes affect sales, it is the quality and reliability factors on which automakers have to compete. Still, a weak yen would give Japanese automakers the possibility to produce vehicles at lower costs, which would translate in a pricing advantage.

“I don’t think a company like General Motors should make excuses about foreign currency,” he said. “We’ve got to compete. “At any one point in time, as long as there is not a systemic shift, we can withstand anything.”

Economists believe that a healthier Japan will help other markets too, as customers here will buy more services and products from the US, China and Europe, helping the global economy.