Abe was assassinated, and the yen depreciated sharply again, falling to 137.270 for a while, setting a new low since the Asian financial crisis in 1998.
further analyzed that in 2012, the yen fluctuated around 75.540. By 137.270 in 2022, the yen depreciated by more than 80% in 10 years.
data shows that Japan's money is becoming less and less valuable:
For example, Wang Wu could buy a 32G version of iPhone4 phone in 2011 for 57,600 yen (about 4,300 yuan at that time).
However, Wang Wu needs 98,800 yen (about 4,900 yuan now) to buy a 128G version of iPhone13 mobile phone. This also indirectly shows that the RMB has maintained its value more in recent years, and China's money is more valuable. What's more terrifying is that according to relevant survey data released by OECD , Japan's average wage has only increased by 4.4% in the past 30 years.
In Japan, I can’t save money, and I can’t even prepare anything for my later years, so I can only continue to work. The problem of
yen reflects the development pattern of Japan, a developed country.
Japan has always developed with manufacturing, especially high-end manufacturing, and has laid out a large number of manufacturing industries outside Japan's country. However, Japan does not have much energy, such as crude oil, coal, copper ore, , etc.
Obviously, the Ukrainian conflict in Russia is not friendly to Japan's development. The high price of crude oil, coal, copper ore, etc. has caused Japan's import costs to continue to increase, and imported inflation continue to rise.
Japanese prices finally rose, and Japan's CPI finally rose. In May 2022, CPI was 42.5% year-on-year compared with in that month. Before that, Japan's CPI was below 1.0% year-on-year.
For example, the iPhone 13 Pro Max mobile phone sold in Japan is about RMB 6,700 before the price increase, and after the price increase is about RMB 7,900 after the price increase, with a price increase of about 17.9%; the large cup of coffee in Japan is about RMB 9 before the price increase, and after the price increase is about RMB 10 after the price increase. This price increase is the first time that the 711 convenience store in Japan has increased the price of this coffee item in 9 years.
In addition, Japanese bread, instant noodles, beer, refrigerators, air conditioners, etc. have also increased their prices.
Data source: wind
Prices rose in Japan, one of Abe's biggest ideals when he was in office. For this reason, there is even Abenomics .
When Abe was in office, the Japanese government took all measures to stimulate the economy, including continuous quantitative easing, continuous printing of money, and even helicopters to spread money, and the banks showed negative interest rates of .
However, Japan's prices did not rise at all.
Abe government even directly increased Japan's consumption tax from 5% to 10%. For example, a certain product is priced at 100 yuan in Japan. When Wang Wu purchased it, in addition to paying 100 yuan, he also needs to pay 100*5%=5 yuan of consumption tax, with a total expenditure of 100+5=105 yuan. Now, the consumption tax has risen to 10%, which means that Wang Wu needs to spend 100+100*10%=110 yuan.
Abe government wants to force raising prices in Japan and increase inflation level in Japan in this way, but unfortunately, the effect is not ideal.
This year, after the conflict in Russia and Ukraine, international energy prices have soared and grain prices have soared. Japan's goal of increasing inflation was easily achieved.
However, this scenario of increasing inflation is the least willing to face in Japan.
Because input inflation is not considered healthy inflation, and even if you are not careful, it is easy to lead to hyperinflation.
For example, Wang Wu is thinner and wants to increase his weight appropriately, making him look healthier and sunny. His original plan was to gain weight naturally through a scientific fitness program, a reasonable diet. If he overeats, his body can gain weight, but it is fat, which may even cause physical discomfort, such as diabetes , hypertension , etc.
Healthy inflation is like healthy weight gain, while imported inflation is like overeating, and the result is self-evident.
Japan's recent trade deficit indirectly shows the pressure brought by Japan's imported inflation.
Japan Trade difference, data source: wind
Japan imported inflation has caused the increase in the cost of imported raw materials in Japan, the price of domestic commodity in Japan has risen, and the inflation rate in Japan has risen, but Japan cannot pass on these costs, or the degree of transfer is limited.
The result of is that the amount of Japanese imported goods increases, but because the amount of Japanese exported goods increases slowly, the amount of Japanese exported goods is smaller than the amount of imported goods, resulting in an trade deficit .
For example, Wang Wu opened a factory and spent 10 million yuan to buy raw materials, but after processing and manufacturing them into finished products, the income from selling finished products was 8 million yuan, resulting in a loss.
This shows that the raw materials imported by Wang Wu are expensive, or Wang Wu's products are not competitive in the market, or the entire market has no demand, etc. But no matter what, Wang Wu suffered a loss in the end. The same is true for Japan's trade deficit, which may be because the price of imported raw materials has risen too much, maybe because the yen has depreciated too much, maybe because the global economic recession, etc., and the result is that Japan has a trade deficit. The biggest disadvantage of such results is the above mentioned, if you are not careful, you can easily fall into a vicious cycle.
Japan's trade deficit increased, the yen further depreciated, Japan's imported inflation further increased, Japan's consumption capacity further decreased, Japan's GDP growth slowed down, Japan's debt further increased, and eventually, it fell into a vicious cycle.
Japanese government debt, data source: wind
Japan's current dilemma is also miserable, with a large amount of imported inflation continuously entering the European continent.
Neither the Western developed countries, such as Japan and Europe, are the United States, and the yen and the euro are not the US dollar.
Therefore, Western developed countries such as Japan and Europe can only be passively beaten, and cannot actively dismantle bombs like the United States.
However, even if the United States can dispose of bombs, it is still frightened. It has greatly increased the rate hike of and has reduced the balance sheet. Who can guarantee that US economy will not decline and will not land hard on ?
It is easy to expose yourself if you are not careful, causing a financial tsunami in the world.
So, at this time, the world needs China, just like the financial crisis in 2008.
However, China is no longer the China in 2008, and China will not follow the old path.
Moreover, China also has its own problems that need to be solved, and China needs healthier development.
(Disclaimer: This article is an objective analysis made by Ye Tan Finance based on public information. It does not constitute investment advice. Please do not use this as the basis for investment.)
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