The yen's exchange rate today is so low that people can't see it, and it is also ushering in a new record low.
As of the 11th of this month, the exchange rate of the yen has fallen to its lowest point since 90 years.
For this situation, it is obvious that the Japanese people cannot accept it, and they have "vented their anger" on the Internet.
Although the Japanese media exposed the news of the latest yen interest rate hike, it still could not reassure the people.
Some people even said that they had stopped using air conditioners for a long time, and they didn't even go to the restaurant.
One has to sigh, is this kind of life really experienced by the people of a developed country?
But if the yen continues to depreciate, the situation may become even more serious, and it may even cause a commotion.
This is by no means alarmist, and the continuous depreciation of the currency is the most unacceptable for the common people.
Everyone is a hard-working worker, and at the end of the year, they find that they are still in debt.
Everything around you hasn't changed, but because of the exchange rate, your money has become "worthless"!
As for why the yen continues to depreciate, this is actually a butterfly effect caused by many factors.
First of all, the depreciation of the yen is closely related to the interest rate hike of the dollar, and the yen can be said to be the "lifeline" of the dollar.
As the dollar's international standing declined, the Fed's private banks also raised the interest rate on the dollar.
However, Japan, as a "close friend" that maintains friendly relations with the United States on a daily basis, has been exploited by the United States.
With the outbreak of the currency war, the global economy has been greatly affected, and Japan is not immune to the disaster.
Today's continued decline in the yen has also given Americans a "glimmer of hope" for the dollar's appreciation.
After all, it only takes a simple operation to maintain the dollar's position in the world, so why not?
As a result, a large number of "bears" began to operate in the shadows, which dealt a heavy blow to the yen.
Because of the huge exchange rate difference between the currencies of the United States and Japan, and the national situation, the interest on deposits in Japan is almost zero.
This makes a magical operation arise in which you can take out a loan in the Bank of Japan through singer means.
The yen was then converted into dollars at the exchange rate, and the money was deposited in a U.S. bank.
Due to the difference in deposit rates, the amount of dollars deposited will become more and more abundant, and the yen will plummet as a result.
This year, the interest rate on US dollar deposits is around 5.25%-5.50%, while the interest on deposits in Japan is only 0%-0.1%.
What is this concept? This means that you just need to repeat the above actions to keep making a profit.
Not only that, but it can also keep the dollar's international standing strong, at the cost of destroying the "value" of the yen.
That's how the so-called "airdroppers" operate, and they get there effortlessly.
The United States has tried this not only against Japan, but also against China.
It's just that our deposit interest doesn't allow them to do this, and it's too expensive to operate.
This is also the reason why the RMB has not been affected too much, and we have done a good job of prevention in advance.
Japan's situation does not allow banks to raise interest rates on deposits, and this year is the first time in 17 years that Japan has raised interest rates.
As for the reason why I have not dared to raise interest rates, I have to mention Japan in the 80s.
At that time, Japan reaped the dividends of the times, and all countries in the world were in the recovery stage after restoring peace.
For some political reasons, the United States has to provide assistance to some countries in order to consolidate its international status.
Japan is one of them, and this is both a good thing and a bad thing for Japan.
Fortunately, thanks to U.S. assistance, Japan was able to achieve rapid growth in a short period of time.
At that time, Japan could be said to be shining brightly, and the per capita GDP continued to rise, and the whole of Japan was full of vitality.
At a time when all countries are recovering, Japan has achieved rapid development.
To put it mildly, Japan's economic situation was on par with that of the United States at the time.
But then Japan also ushered in a "backlash" that it regrets to this day, and Japan began to engage in real estate.
Thanks to the strong economic fundamentals, the real estate industry is growing at an unimaginable pace in Japan.
Many capitalists have also joined the "real estate struggle", and the characteristics of houses are similar to those of stocks.
To put it bluntly, both are things whose value rises in direct proportion to their popularity.
This is also something that cannot be helped, the market is like this, the price is the same, the demand determines the price.
As a large number of "property speculation" frenzy swept across Japan, real estate has gradually become an "appreciation product".
Many people also choose to take out a loan to buy a house and leave it there, waiting for it to appreciate in value in a few years before selling it.
This phenomenon makes the house completely lose its original residential attributes, and completely becomes a "financial product".
And many ordinary people gradually can't afford to buy a house, and the price of the house has become sky-high.
Until one day, the price of the house collapsed, and even the capitalists could not afford it.
A large number of people began to choose not to buy a house, and the demand became smaller, and the price naturally plummeted.
But with the lessons of the past, the common people also choose not to buy a house, after all, they will lose money if they buy, who will want to buy.
The collapse of the real estate sector has also triggered a series of social problems, such as not getting married and not spending.
As a result, the entire Japanese economy has been hit hard, and the entire society has also been affected, resulting in a series of butterfly effects.
The problem of an aging society is gradually beginning to appear, and the problem of low fertility is also difficult to solve.
And due to the previous frenzy of borrowing to buy houses, Japanese banks have run out of money to borrow.
Many commercial projects could not be carried out as planned due to the broken capital chain.
On the surface, Japan's real estate collapsed, but in fact, the entire Japanese economy has come to a near "standstill".
In the case that everyone is not spending, banks can only reduce the interest rate on deposits, the purpose of which is to stimulate consumption.
But even so, no one dares to spend, and the interest rate on bank deposits has not been adjusted.
That's why the Bank of Japan hasn't raised interest rates for more than a decade, because the banks simply don't dare.
And this year's interest rate hike is also forced to be helpless, and it is just the Japanese government in response to the currency war.
Otherwise, according to the exchange rate difference between the dollar and the yen, soon the yen of the Bank of Japan will be "looted".
It is precisely these factors that have led to such an embarrassing situation for the yen today.
The long-suppressed emotions of the common people will explode, but in a developed country, the people have no "happiness" at all.
Therefore, it is normal for Japanese people to express their protests on the Internet, and there must always be an outlet.
There is a question mark over the news of the yen rate hike reported by the local media.
In the face of the current situation of the common people, does the Bank of Japan really dare to raise interest rates? What do you think about this?
References to the article:
China News Weekly2024-03-30
Why did Japan's negative interest rate policy end?
Financial Circle2024-02-01
The Federal Reserve kept its benchmark interest rate unchanged
National Business Daily 2024-04-11
The yen has fallen sharply against the US dollar, and the Japanese Government will not rule out any means of response! Fumio Kishida expressed his position