Per Editor: Li Zedong
According to CCTV news reports, on the afternoon of the 20th local time, according to Japan's Kyodo News Agency and other media reports, Japanese Prime Minister Kishida Fumio and Bank of Japan Governor Kuroda Higashihiko held talks at the prime minister's official residence and exchanged views on recent foreign exchange market trends. After the meeting, Kishida Fumio said that they mentioned a sharp depreciation of the yen as a concern in the talks.
Image source: CCTV news screenshot
Kuroda also said that the sharp depreciation of the yen has brought various uncertainties to the business plans of Japanese companies and does not want this situation to continue. He said he would pay attention to the movements in the foreign exchange market and cooperate with the government to respond.
It is understood that recently, the exchange rate of the yen against the US dollar has been declining. Earlier last week, the yen fell to 135.58 yen against the dollar, a new 24-year low. As of press time, the yen's exchange rate against the US dollar is 135.3 yen against 1 US dollar.
Image source: Ying Wei Cai
Japanese economists: The divergence of monetary policies between the United States and Japan triggers a depreciation of the yen
According to CCTV news, on June 15, local time, the US Federal Reserve announced a 75 basis point rate hike to curb inflation from soaring again. It is also the Fed's largest rate hike since 1994.
It is understood that in March this year, the Fed raised the target range of the federal funds rate by 25 basis points from the level close to zero, opening a tightening cycle to curb inflation. In early May, the Fed announced another 50 basis point rate hike.
Japanese experts said that this year, the United States raised interest rates at an unprecedented rate, and a large number of funds flowing into the international market returned to the United States; Japan continues to maintain ultra-loose monetary policy, resulting in a large number of foreign exchange markets buying dollars and selling yen, which is one of the main reasons for the depreciation of the yen.
Image source: CCTV news screenshot
Hideo Kumano, chief economist of Japan's Daiichi Institute of Life Economics: In March this year, the United States suddenly raised interest rates, and at an unprecedented rate, a large amount of money flowing into the international market returned to the United States, resulting in global inflation.
(Yen depreciation) There are also reasons for Japan itself, the United States and Europe have begun financial tightening policies, only Japan continues to maintain ultra-loose monetary policy, resulting in a large number of foreign exchange markets to buy dollars, sell the yen, causing the yen to depreciate.
The rapid depreciation of the yen has put more pressure on small and medium-sized enterprises
Hideo Kumano believes that the rapid depreciation of the yen may prevent Japanese companies from responding in a timely manner, among which small and medium-sized enterprises face greater impact.
Hideo Kumano: For Japanese smes and companies with a focus on domestic business, import prices have risen, profits have decreased, and even deficits have been lost. It can be said that most small and medium-sized enterprises are more affected by the depreciation of the yen than large enterprises.
Image source: CCTV news screenshot
Hideo Kumano believes that there are structural reasons for the depreciation of the yen that the economy is highly dependent on imports. As international commodity prices continue to rise, Japan's imports continue to rise.
Data released by the Japanese Ministry of Finance on the 16th showed that Japan's imports in May increased by 48.9% year-on-year, a new high for three consecutive months.
Japan's trade deficit in May was the second highest since comparable data were available in 1979 and was the 10th consecutive month of a trade deficit.
The depreciation of the yen has exceeded expectations Government control is very important
It is understood that Hideo Kumano has been engaged in professional economic analysis for 20 years. Regarding the rare rapid depreciation of the yen, he predicted that due to the different directions of financial and monetary policies in Japan and the United States, it may cause the interest rate differential to further widen, and the yen may continue to depreciate.
Image source: CCTV news screenshot
Hideo Kumano, chief economist of Japan's Daiichi Institute of Life Economics: It is clear that the rate of depreciation of the yen has exceeded the impact of the increase in interest rates in the United States, and if the market loses confidence in the yen, the yen will further depreciate, and there will be a depreciation that exceeds expectations. I think the current depreciation of the yen may be beyond the reasonable range, and the control of the Japanese government and the central bank is very important.
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