Third, such purchases of assets tend to put downward pressure on the exchange rate, since they reinforce market expectations of a lower profile for interest rates for a longer period. This can boost aggregate demand further, through increased export sales or, more simply, because existing export sales produce more revenue measured in domestic currency.
Both the Bundesbank’s office in Tokyo and the Bank of Japan’s office in Frankfurt provided an efficient channel for a vital bilateral flow of information. Germany stood side by side with Japan in the difficult times following the tragic events of 11 March, 2011. We are pleased to learn that the Japanese economy is on a path to recovery.