Japanese economist: The United States is transferring difficulties and crises to the world
Recently, the Federal Reserve has continued to aggressively raise interest rates, causing the yen to depreciate significantly against the US dollar, forcing the Japanese government to interfere in the foreign exchange market for the first time in 24 years. Hitomi Tada, chief economist of Japan Sigma Capital, said in an exclusive interview with Xinhua News Agency recently that it is not only Japan that is in trouble due to the US rate hike, but the United States is transferring difficulties and crises to the world.
Da Dai Hidetoshi pointed out that because the US dollar occupies a monopoly position in the global economy, especially in international trade, the result of the Federal Reserve hike in is that funds from all over the world flow to the United States, directly causing currencies depreciation and prices to rise in countries around the world. Some countries are forced to raise interest rates, and the economy is in trouble. It can be said that through interest rate hikes, the United States has passed on the difficulties it currently faces and the possible crisis in the future to the whole world.
He said that the sharp depreciation of the yen is not Japan, but the United States. The United States has missed the best window for suppressing inflation. Now, in order to solve the high inflation problem it faces, it has repeatedly raised interest rates despite the interests of other countries. The Federal Reserve has raised interest rates five times in a row this year and may continue to raise interest rates this year.
On September 21, US Federal Reserve Chairman Powell attended a press conference in Washington. Xinhua News Agency (photo by Alexander Norton)
He analyzed that the Bank of Japan is trapped by the reality of weak domestic demand and weak economic recovery in Japan, and can only stick to the loose monetary policy beyond . The monetary policy of the Japanese and American central banks is opposite, causing the yen exchange rate to plummet. According to Bank of International Settlements data, in August this year, the actual effective exchange rate of in Japan has fallen to the level 50 years ago.
This is an electronic display screen showing the exchange rate information of the yen to the US dollar, taken on September 2 in Tokyo, Japan. Xinhua News Agency (photo by Gong Xiuxi)
He pointed out that Japan is suffering from the double impact of the sharp depreciation of the yen and the sharp rise in import prices. Because Japan is highly dependent on imports, the high import prices have put many Japanese companies in trouble. Ordinary Japanese consumers have to bear the pain of rising prices across the board.
British expert: The Fed's aggressive interest rate hike brings adverse effects to Europe and emerging markets
Fed's interest rate hike global negative spillover effect continues to expand. Several British experts said in an interview with Xinhua News Agency recently that the Fed's aggressive interest rate hikes have had a negative impact on the world economy, which on the one hand has led to investment flowing from developed economies such as , EU , and the United Kingdom to the United States, and on the other hand, it has significantly increased the debt repayment cost of emerging markets.
Ian Berger, professor at the Institute of European Studies at the London School of Economics in the United Kingdom, said that the U.S. interest rate policy often puts pressure on the exchange rates of currencies in other countries, and the Federal Reserve also knows that what it does will have a chain reaction to the economies of other parts of the world. If the UK wants to avoid a sharp depreciation of the pound, it will have to follow the pace of US interest rate hikes. The pound, euro, and yen have all experienced this.
picture This is some pounds taken by a family in Manchester, England on March 18. Xinhua News Agency (photo by Jon Hugper)
Professor at the University of Birmingham, UK, John Bryson, told reporters that the Federal Reserve has adopted aggressive interest rate hikes to curb its own inflation, which will lead to investment flow from Europe to the United States. As the interest rate gap between the United States, the EU and the United Kingdom has widened, the scale of investment flowing to the United States has also further expanded.
Berg also pointed out that some emerging markets in are suffering a very severe impact and will face currency depreciation and intensified inflation.
According to a report by Gareth Leather, an economist at Capito International Macroeconomic Consulting Corporation, the strengthening of dollar is threatening countries with large amounts of foreign debt and severe inflation, causing them to raise interest rates. The proportion of debts in these countries to GDP will increase, and the debt repayment cost will increase. The weak local currency will also push up the cost of imported goods and further exacerbate inflation. Given that inflation levels in many countries have remained high recently, a stronger dollar will create particularly great concerns.
(Original title: Japanese economist: The United States is transferring difficulties and crises to the world!)
Source: Xinhua News Agency
Process Editor: TF060
