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BY MATTHEW HIBBARD

The Japanese yen is at an all-time high, but that doesn’t mean good news for the overall economy.

Japanese Prime Minister Naoto Kan signed an $11 billion stimulus plan to help ease the economy towards recovery and unveiled new measures to provide credit to its financial institutions.

But as Channel NewsAsia reports, these actions have a direct impact on Japan’s competitive edge in the global market.

“The latest measures aimed to lower interests rates in the marketplace with a view to easing the yen’s strength. The yen hit a 15-year high against the dollar last week. That’s bad news for Japan’s exporters as it erodes their international profits, makes their goods less competitive abroad.”

According to an investment analyst quoted by the Financial Times, the government action might be a little late. Well-known exports like Canon and Toyota are already feeling the pinch.

“Toyota, the world’s biggest carmaker which receives about 30 percent of its revenue from North America, fell 2.4 percent, while Canon, which gets more than 80 percent of its revenue overseas, sank 4.5 percent.”

Financial analysts say the Japanese government has thrown in all it can to help its economy recover. Rajiv Biswas from The Economist Group tells CNBC, Japan is running out of weapons.

“Their armory is pretty much bare. They have cut rates as far as they can in terms of policy rate. They can increase their purchasing of bonds, but there are very limited options that they have.”
 
Data earlier this month showed annual growth slowed to about 9.4 percent, and Japan lost its position to China as the world’s No. 2 economy.

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