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Q: Is there any upside for South Korea? A stronger won can help ease inflation by allowing foreign companies to sell products at cheaper prices in South Korea and by reducing import prices of gas, crude oil and raw materials that resource-thin South Korea uses to make products that it exports. South Korean shoppers might find some goods getting cheaper. Q: Is there any downside for Japan? Rising costs for imported energy could hurt many manufacturers. Companies that in previous years sought to neutralize the toll the strong yen was taking by moving production overseas or substituting foreign-made components for locally produced ones will find their costs rising. Ordinary Japanese could suffer reduced spending power because a strong yen had helped retailers to keep prices of imported goods down and restaurants have relied on low-cost imported foods to keep menus affordable. Q: Could the weak yen spark a global currency war? Opinions are divided. Economist Lim Hee-jung at Hyundai Research Institute says a currency war is far-fetched. Others say it could depend on how far the yen falls. "It is very difficult to say what is a real fair value for a currency. At the level of 90 yen you can argue it's just a correction and that Japan has a fair argument to make," says Masamichi Adachi of JP Morgan in Tokyo. "If it goes beyond 110 yen to the dollar and it is driven by policies it could be a problem."
[Associated
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