The U.S. dollar-yen exchange rate has surged from around 120 to around 125 since May 22, when Federal Reserve Chair Janet Yellen hinted that the U.S. is expected to raise interest rates this year.

The exchange rate of the US dollar against the Japanese yen has started a wave of gains since May 22 after US Federal Reserve Chairman Janet Yellen hinted that the United States is expected to raise interest rates this year. It has soared from about 120 to about 125. . However, Bank of Japan (BOJ) President Haruhiko Kuroda poured cold water on the market on the 10th, saying that the U.S. dollar may not rise due to the FED raising interest rates, and the real effective exchange rate of the yen is already quite low, so it is unlikely to fall further. .

Kuroda's speech caused the U.S. dollar to yen to fall directly from around 124.5 to below 123. Harvest XQ Global Winner System quotation showed that as of the end of the New York market on the 10th, the U.S. dollar fell 1.35% to 122.65 against the yen, the highest level in 2013. The largest single-day decline since August 27, the intraday low of 122.44 on the 10th was more than 2 yen higher than the intraday high of 124.62. Although Kuroda came forward to sterilize the situation through Japanese Economy and Finance Minister Akira Amari on the evening of the 10th, saying that the content of the conversation had been somewhat misinterpreted, the sterilization effect seemed to be poor. The US dollar against the yen continued to hover around 123 on the 11th.

Thomson Reuters reported on the 10th that Yuji Saito, head of foreign exchange at Credit Agricole SA, France’s third largest bank, said that Kuroda’s remarks on the 10th were surprising; he said that although the US dollar (relative to We are alarmed by the rising speed of the yen), but Kuroda even raised specific indicators such as "real effective exchange rate", which also makes people speculate that Kuroda believes that the yen has depreciated too much and will not depreciate further at present. Moreover, Kuroda chose to make such remarks at this time, which also makes people speculate that the "level around 125" may be Kuroda's defense line.

reported that Citibank Japan senior FX market analyst Ogawa Maki also pointed out that due to Kuroda's remarks, the U.S. dollar against the yen may not rise significantly in the near future. Although Kuroda did not specify the specific exchange rate level, the U.S. dollar against the yen The recent high of around 125 may be the upper limit currently set by Kuroda.

affects 70% of manufacturing operations

The depreciation of the yen is a piece of pie in the sky for large companies such as Toyota, which is expected to earn huge exchange gains. However, for small and medium-sized enterprises that support the overall Japanese economy, the yen will Excessive depreciation of the yuan may become a nightmare because the price of imported materials and other materials will soar.

Japan’s Osaka Chamber of Commerce and Industry (hereinafter referred to as Dashang) released a survey report on the 10th. On the premise that the US dollar against the yen continues to maintain a level of around 125, more than 60% (63.8%) of Japanese small and medium-sized enterprises said that their company operations will be affected by this. have been significantly negatively affected; if we look at the manufacturing industry alone, nearly 70% (69.6%) said their operations would be significantly affected.

Dashang pointed out that as many as 24.2% of small and medium-sized enterprises hope that the exchange rate level is "100-less than 105", which is the highest proportion, followed by "105-less than 110 (13.2%)" and "95-less than 100 (12.1%)" respectively.

As of 11:10 a.m. Taipei time on the 11th, the U.S. dollar was trading at 123.04 against the yen, which is far higher than the "100-less than 105" level that the above-mentioned Japanese small and medium-sized enterprises most hope for.

According to Thomson Reuters, the Japanese government/BOJ was forced to step in to prevent the depreciation of the yen from around 120 to 130 between November and December 1997. However, the results were not good. In June 1998, the yen depreciated to 146.75, forcing the United States to intervene with Japan, and successfully halted the yen's depreciation.

(This article is reprinted with permission from MoneyDJ News; first image source: Flickr/Japanexpertterna.seCC BY 2.0)

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