The moment American growth slows down below, say, 2 percent, trade pressures are not just something that we talk about but are something that are really going to hit policy makers.
There may be some political pressure that the U.S. no longer wants a strong dollar, but that's not going to prevent Japanese capital from fleeing Japan, because in Japan, money doesn't earn anything.
Health-care reform is a huge issue. It's also a huge battle. There are big vested interests that are just as bad as contractors and postal lobbyists.
The urgency to appoint a true deflation fighter at the Bank of Japan is not going to disappear with this report.
They are buying everything from New York real estate to American securities to corporations to their hard assets. That's what's driving the currency market.
Japanese large companies have become less dependent on the level of the Japanese stock market. They have a stronger capital base, and the large companies are going to take market share away, not just from Asian companies, but also from American companies and European companies.
Exports are the icing on the cake.
The Japanese consumer is very isolated from financial market dynamics.
Japan Inc. is getting stronger, and their profitability continues to improve very nicely.
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