In other words, cut wages (in real terms) to boost corporate profits. PS: Not about Japan, but I recently read that in US, corporate profits as % of GDP were at the highest levels since 1960s. No wonder there's a "global savings glut" as capital ends up in fewer and fewer hands at the top of the pyramid.
I think you hit the nail in the head! Currency devaluations come about to lower wages to boost competitiveness, and hence, sustain or increase employment. It is political suicide for most governments to allow their economy to falter: which is reflected by an increase in unemployment or wage cuts. Adjusting the rate of exchange is the smart thing to do... I would add to your comment on the global liquidity glut, that it is mostly in the hands of central banks and oil producers. Normally, banks would try to curtail inflation by raising rates (which makes their currency rise). This has not been the case with asian CBs: an increase in employment has been their goal. In general, I agree, but... First, I think this indicator is very positive, corporations are at their most efficient levels in years. I think it really has to do with the asian competition, China mostly... I have the feeling that only the most efficient US companies are surviving the chinese onslaught, the rest are being wiped out... Which additionally leaves more labor queuing for less jobs, with the natural consequence: lowering US wages to approach chinese wages, till prices find their equilibrium... So, at the center of all, you find that chinese policy of employment (and their low wages) explains most of what is going on, and will determine the behavior of currency fluctuations for years to come.