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The Japanese economy has been undergoing shock treatment to awaken it from a deflationary slump. A major part of this program is the devaluation of the yen, which has fallen 21% relative to the dollar since the end of the third quarter of 2012. The economy is indeed showing signs of life with the Nikkei 225 Index up 54%. Despite recent volatility, the Japanese stock market still outperformed all other developed markets in the first half of 2013.

With the U.S. economy in only a tepid recovery, should policymakers turn Japanese by depreciating the dollar to juice our manufacturing base and exports? Few stimulus options remain with interest rates still near zero and high debts restraining federal spending. For Obama to meet his 2010 promise to double exports by the end of 2014, he’ll need far more than his faltering trade deal with the EU.

On the surface, devaluing the dollar seems attractive with inflation below the Fed’s target. Out of those companies in the S&P 500 Index that report foreign sales, almost half of revenue comes from another country. So a cheaper dollar would boost exports while also increasing the dollar value of foreign assets. Consider just cash. Excluding financials, publicly traded companies have over $800 billion outside the U.S.

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