In the past few days, the yen has been swept by the news of large-scale shorting. Not only Japan, but also the entire Asian currency exchange rate is at risk of a total collapse.
Why did such a big scene suddenly appear? What exactly do the Americans want to do? This is very likely to be the last gamble plan of the Americans in the current round of US dollar interest rate hikes.
In recent days, the yen has fallen sharply, falling below the significant mark of 154, the lowest since 1990.
The exchange rate is the backbone of the country's asset value, and the sharp drop in the yen exchange rate has led to a panic decline in Japan's entire capital market, forming a situation of triple killing of foreign exchange, stocks, and bonds.
In addition to Japan, South Korea, India, Vietnam, and Indonesia have also seen a sharp drop in exchange rates recently, and the following is the data for April 16.
In the foreign exchange market in Seoul, South Korea, the exchange rate of the won fell below 1,400 won to 1 dollar, and it was still around 1,300 in January.
The Indian rupee closed at 83.69 against the US dollar, down from 83.50 in November last year and fell to a record low.
The Vietnamese dong exchange rate fell to 25,295 at one point, a record low.
The rupiah was one of the sharpest Asian currencies, falling more than 2% on the day to a four-year low.
Such a crazy situation is probably the most tragic financial incident since the Asian financial crisis in 1998.
There are signs that the big short dollar is massively shorting major Asian currencies, with the Japanese yen being the main target.
Yesterday, we published an article titled "The Dollar Is Fierce! Asia Starts a Currency Defense War, the Yen Collapses, and the Renminbi Makes a Ruthless Move", saying that Europe has already reaped the harvest, and only East Asia is still as solid as a rock.
At present, global wealth is concentrated in three major economic centers: North America, Europe and East Asia, where the dollar must be contested.
However, this time, the stability of East Asia and even the whole of Asia is due to the refusal of Japan and China to follow the dollar's interest rate hikes, which greatly reduces the power of the dollar's interest rate hikes.
Because this has in fact led to a large amount of cheap yen and yuan, as well as dollar foreign exchange, flowing from these two countries to neighboring Asian countries, supporting the whole of Asia.
Since the yen is also supported by it, the Americans, after recovering from the experience, will start with the yen first.
The big short dollar has long been concentrated in Japan, with net yen shorts held by leveraged funds and asset managers rising to 148388 in the week of April 2, the highest level since January 2007.
From April 4 to 9, U.S. Treasury Secretary Janet Yellen visited China, and as soon as she left on the front foot, the large-scale shorting of the yen and Asian currencies began.
Could it be that the Americans came to the door to sue for peace, and only then did they start the final gambling plan?
The purpose behind this sudden large-scale shorting of Asian currencies by US dollar bears is not only to harvest the assets of these countries, but also to create panic in the Asian capital market and drive Asian safe-haven capital to flow further to the United States.
More importantly, they want to push the dollar to strengthen further and create the conditions for a rate hike. Because they are afraid that if the dollar cuts interest rates, the dollar will depreciate significantly.
On April 17, the U.S. dollar index expanded rapidly, rising to around 106.50, refreshing its high since November 2023 for two consecutive days and hitting a five-month high for three consecutive days.
At the same time, the renminbi appears to have depreciated slightly on the surface, but in fact it is implicitly appreciating.
On April 16, the RMB exchange rate fell to 7.2618 from 7.1264 at the beginning of the year, depreciating by 1.93%. However, during the same period, the dollar index appreciated by 4.88% to 106.25 from 101.31 at the beginning of the year.
The difference between the two is 2.95 percentage points, which means that although the renminbi has depreciated by 1.93% against the US dollar, it has appreciated by 2.95% against other major currencies in the world.
If the U.S. dollar cuts interest rates and the U.S. dollar index falls, this implicit appreciation will become the actual appreciation of the renminbi against the U.S. dollar.
Theoretically, if the dollar index falls to the level at the beginning of the year, the yuan will appreciate against the dollar to a level of about 6.9 to 1. If the dollar index falls below 100, the yuan will regain a high of around 6.8.
The big bears of the US dollar are engaged in wind and rain, the major Asian currencies have depreciated sharply, the US dollar has appreciated, and the renminbi is also implicitly appreciating, which means that the international capital that has recently bought the US dollar and the renminbi has increased.
In other words, the Asian capital market turmoil has generated a large amount of safe-haven capital, most of which may flow to the United States, but some of it to China.
This is the fortune of the country, and the Americans will never be able to defeat our strength in the economic fundamentals, let alone shake our national security and stability, and this is the confidence of the RMB exchange rate.
That is why, since the beginning of this year, the United States has been constantly making things around us in an attempt to create regional turmoil and disrupt the flow of capital. However, despite their constant provocations, the situation remained calm, and these plots failed.
Therefore, national security and stability is the greatest happiness and freedom of the people, and my generation should be fortunate to be Chinese.