With the US dollar hikes interest rates , countries around the world are suffering from this impact, with their own currencies depreciating significantly, capital outflows and other bad effects continue. Among them, Japan is particularly affected by the developed economy .
According to relevant foreign exchange data, the yen continued to depreciate by 1% against the US dollar, falling to 148.8595, not only setting a new low this year, but also the lowest level in the past 32 years. It has fallen back to the level of 1990. Such a significant depreciation in just one year will be self-evident.
So why is the yen still unwilling to raise interest rates even though it is facing continuous depreciation and deteriorating economic prospects?
One important factor is that the interest rate hike will likely worsen Japan's economic development. Even in the face of the problem of choosing one of the two bottles of poison, Japan must make such a difficult choice. The reason why
says this is mainly because Japan's economic development itself is relatively stagnant, and Japan also has serious debt problems. If Japan chooses to raise interest rates further, this method will not only lead to a tightening of the liquidity of the yen, but also lead to a decrease in people's income levels, and also lead to a negative cycle of local economic development.
After the Federal Reserve raises interest rates , we will find that many countries will choose to raise interest rates together, and in this way, avoid the emergence of inflation .
, especially when the rate of in many countries is further depreciated due to the impact of US dollar interest rate hikes, the rate hikes are particularly obvious. In fact, Japan's interest rate hikes against the US dollar are also "hardly hurt". The exchange rate of the yen has hit a new low in 30 years. This situation not only caused a significant decline in Japan's GDP, but also caused a significant reduction in the purchasing ability of resources.
Despite this, if Japan chooses to raise interest rates on its own initiative, this method will have a negative impact on local economic development. For Japan, it is obviously more important to pay attention to economic development issues and is willing to take the initiative to bear the impact of inflation caused by no interest rate hikes, so it is difficult for Japan to choose to raise interest rates.
For Federal , even if the Fed's interest rate hike will cause the United States to face the risk of an economic recession, this is the inevitable negative impact of the Fed's interest rate hike, but in order to cope with the most difficult inflation problem at present, this is the only way.
But for Japan, if Japan chooses to raise interest rates, the situation faced by Japan will be much more severe than that of the United States, because many large companies including Japan have relatively large debt scale. In other words, if Japan's economic recession is caused by interest rate hikes, this situation may directly lead to Japan's insolvency. It is precisely for this reason that Japan will always implement loose monetary measures and has never chosen to raise interest rates significantly.
However, the pace of US dollar interest rate hikes has not stopped, and the arguments about the Federal Reserve continuing to raise interest rates are rampant. In order to curb the still high inflation in China, the only way is to raise interest rates and raise interest rates.
From this point of view, there is really not much time left for the yen. Whether to continue to resist and continue to be harvested as a leek, or choose to raise interest rates to risk the collapse, this is a dilemma.
