Source Text 2:

The war rhetoric implies that America and Japan are directly suppressing their currencies to boost exports and suppress imports. That would be a zero-sum game which could degenerate into protectionism and a collapse in trade. But this is not what they are doing. When central banks have lowered their short-term interest rate to near zero and thus exhausted their conventional monetary methods, they turn to unconventional means such as QE (expansion of the money supply) or convincing people that inflation will rise. Both actions should lower real (inflation-adjusted) interest rates. This may now be happening in Japan. The principal goal of this policy is to stimulate domestic spending and investment. As a by-product, lower real rates usually weaken the currency as well, and that in turn tends to depress imports. But if the policy is successful in reviving domestic demand, it will eventually lead to higher imports. Aggressive monetary expansion in a big economy suffering from weak demand and subdued inflation is good for the rest of the world, not bad. The International Monetary Fund concluded that America's first rounds of monetary laxity boosted its trading partners' output by as much as 0.3%. The dollar did weaken, but that became a motivation for Japan's stepped-up assault on deflation. The combined monetary boost on opposite sides of the Pacific has been a powerful elixir for global investor confidence.