TOKYOMay 11 (News On Japan) – Payments for digital services provided by overseas IT giants have emerged as a new factor contributing to the yen’s decline, economic journalist Ideguchi reports.
The hidden cause of the yen’s continued weakness, beyond what can be addressed through currency intervention or changes in monetary policy, is the “digital deficit.”
The digital shortage refers to the shortage that Japanese companies and individuals experience when using digital services from international IT giants such as GAFA (Google, Apple, Facebook, Amazon). This deficit has continued to grow, reaching 5.4 trillion yen last fiscal year.
While Japan is making progress in digitalization, the majority of services used come from companies like GAFA, leading to a significant outflow of Japanese money abroad.
Moreover, this digital shortage could further accelerate the yen’s depreciation. This is because paying these foreign companies involves selling yen to buy dollars.
Last week, the yen hit a 34-year low at 160 yen per dollar. As long as Japan remains dependent on foreign digital services, it appears locked into a structure from which it cannot escape.
Developing Japanese digital services that can compete with GAFA is a significant challenge in preventing the outflow of resources.
Source: TBS
