Welcome to the logical statement. Under the strong US dollar, this is already common to everyone's view of the appreciation of mainstream currencies around the world. and I think the worst currency among them is probably the yen. The yen has reached the 1:150 mark today and has crossed the 1:145 mark.
yen has fallen by more than 25% this year, which makes the total per capita gdp and Japanese gdp calculated in US dollars have reached a new historical low. Yes, in the past we often said that the Japanese economy had been stagnant for 30 years, which is actually a disguised praise on Japan. Japan's GDP today is the same as 30 years ago. At that time, people were so rich, which is what we envy. However, from now on, when we talk about the Japanese economy, it will not be stagnant for 30 years, but five, ten or even twenty years since then.
Why? The total GDP of Japan has been below US$4,000 billion this year, and the depreciation of the currency has seriously affected Japan's domestic economy. Price increases have been the main theme of the Japanese economy in the past few months. Yes, Japanese people find that prices of almost all the items around them are rising, so what should I do? Should the Japanese government come forward to coordinate?
The Japanese government also said in the first two months that this is a normal phenomenon. The Japanese government is not ready to take action. However, in recent days, the Japanese government has not been able to sit still. The depreciation speed is too fast if it does not take action. Therefore, the Japanese government has taken action and sold out a large amount of US dollars in its hands to buy the yen, hoping to reverse the trend. However, at the beginning, it took a little effect, and the yen still fell against the US dollar next. Why?
The weapons in the hands of the Japanese government are limited. How can the country's currency appreciate against the US dollar? There are only two aspects. On the one hand, why has the US dollar been strong recently and the US dollar appreciated? The main reason is that the United States is constantly hiking interest rates on and hiking interest rates on the whole world. Since the beginning of this year, the Federal Reserve has raised interest rates five times, and has increased 75 basis points every time in the last three times. Even so, Americans think it is not enough.
The Federal Reserve will raise interest rates at least twice this year. The US benchmark interest rate will soon exceed 4%. What does this mean? How many companies have we worked hard for a year and your overall profit margin can exceed 5%, it would be good if you don’t lose money. In other words, for many Americans, there is no need to start a business or start a business. If you throw your money into the bank and earn more than 4% of your return in a year. As the United States continues to raise interest rates, the US dollar in countries around the world has returned because they feel that the interest rate on the dollar is high. Of course, I can get the money to the United States and deposit it in the bank, so I can make money on my own. This has caused countries around the world to suffer from insufficient liquidity. The currencies of countries around the world are extremely depreciating against the US dollar, so European countries adopt a state of coordinating with the United States. If you raise interest rates, I will also raise interest rates to reduce the speed of currency outflows and make the country's currency depreciation not so rapidly.
Can Japan use this trick? Can't! Why? Because Japan is a country with low interest rates negative interest rates , Japan dare not follow the US rate hike. mainly has two levels. On the one hand, Japan's economy is not good and a loose monetary environment is needed to stimulate economic development. It is different from the United States. The United States has indiscriminately printed money a while ago, which has caused the economy to be weak, so even if the interest rate hike has had an impact on the economy, Americans can support it. Japan has been deflation in for many years, and there is no inflation in . If you raise interest rates, the Japanese economy will immediately decline. Japan cannot even stimulate the economy. You have to raise interest rates to curb economic development. This is not possible.
On the other hand, the total amount of Japanese government bonds is too high. The total amount of US GDP is about 23 trillion US dollars, and the government bonds exceed 30 trillion US dollars, which is already higher than GDP. However, Japan's government bonds account for 2.5 times GDP. You can't afford such a huge amount of government bonds, and it's good to pay back some interest every year.Fortunately, Japan is a country with zero interest rates and negative interest rates, so even if the total amount of government bonds continues to soar, Japan's fiscal policy does not have much pressure. Now if you dare to raise interest rates like the United States, the interest rate will be increased, and the interest rate will be astronomical every year, so Japan will not dare to raise interest rates.
So what other ways does the Japanese government have to make the yen appreciate? That is to use your foreign exchange reserves to release a large amount of US dollars in the market and buy yen. This is a local method. Sometimes stupid methods can work effectively. The key is how many bullets you have in your hands. The number of foreign exchange reserves held by the Japanese government is one of the best in the world. Of course, a large amount of foreign exchange reserves were bought by the Japanese government US bonds . Therefore, today the Japanese government holds more than 1 trillion US dollars in US dollars, ranking first in the world. This also allows the Japanese government to sell the dollar cash that is truly held by the Japanese government so that there is not much US dollar that supports the Japanese yen.
Last week, Japan probably used hundreds of billions of RMB of US dollars to buy yen crazily, but it is obvious that the effect is not very obvious. Today, the strength of the US dollar and the weakness of the yen can no longer be leveraged by tens of billions of dollars. Moreover, many financial officials also said that in the past few decades, the Japanese government has considered not to make the yen appreciate, because it is obvious that the appreciation of the yen will undermine the price competitiveness of Japanese commodity exports and reduce Japan's exports.
And what Japan needs to consider now is not to prevent the yen from appreciation, but to prevent the yen from depreciating. The weapons in the hands of the Japanese government are really limited. It is relatively easy to depreciate the local currency and , but to make the local currency appreciate, this is probably not something that a Japanese government can do. The Japanese government now also asks the United States for market operations with him so that the yen can appreciate.
But it is obvious that the United States does not have this idea now, so it is true that the weapons in the hands of the Japanese government are limited, and it is difficult to make the yen return to a high level. Moreover, according to previous calculations, when the yen depreciates, it is beneficial to Japan's commodity exports. Japan can maintain a high surplus, which is a good thing to make money. However, since Japan is a resource-scarce country, the yen depreciated rapidly, and it took more money to buy energy and resources in the international market. Eventually, although the yen depreciated in the end, Japan not only had no surplus, but instead had a deficit. Japan's economy has been deficit for 13 consecutive months, so the depreciation of the yen is not only not good for Japan's trade and exports, but has a counterproductive effect. If continues to be depreciated like this, there will be a big problem in the Japanese economy!
