Japan's Currency: Wonupmanship

This article discusses the relationship between the Korean won and the Japanese yen. The yen has been very strong in recent years, which has led to some unusual weaknesses such as increased red tape for Japanese companies. Another weakness is that in the midst of the global financial crisis the won has lost about 50% of its value against the yen. This means that Korean companies are able to severely undercut Japanese companies with which they are competing and bring Korea back to economic growth. One specific example of how Korea is accelerating while Japan is staggering is the growth of Samsung, a Korean company, who just saw Elpida, a Japanese competitor go bankrupt. Although at first Korea was forced to rely on a cheaper currency for its business advantages, now they feel confident with their level of market penetration in Asia and elsewhere, believing that it would take a super-cheap yen for Japan to catch up with them. This is an interesting article because the rise of South Korea is fairly recent and Japan used to be such a powerful country for business. The fact that it is struggling to hold its ground is big news.

3 March 2012
http://www.economist.com/node/21548968