At the beginning of 2024, the global financial markets staged a shocking drama:
The yen suddenly and strongly depreciated. The collapse of this currency has had a profound impact on economic activity in many countries.
Among them, it is clear that China has emerged as a surprise winner in this upheaval.
The depreciation of the yen should be a wake-up call for any country, especially those with close economic ties with Japan.
For China, however, this unexpectedly opens the door to interests.
The depreciation of the yen has made Chinese goods relatively cheaper in the Japanese market.
To put it simply, just like Chinese products are suddenly discounted in Japan, it naturally attracts the attention of more Japanese consumers.
Specific data shows that since the yen began to depreciate in early 2024, Chinese exports to Japan have increased by about 20% in just a few months.
This growth has boosted the market share of Chinese goods in Japan, resulting in a considerable increase in revenue for Chinese manufacturers and exporters.
In addition to the direct impact on exports, the depreciation of the yen has had a positive impact on the Chinese economy on another level.
Due to the depreciation of the yen, the cost of various goods and technical equipment imported from Japan has fallen significantly.
Chinese manufacturers can source high-quality Japanese machinery and technology products at a lower cost, which directly improves production efficiency and product profit margins.
Not only commodities and technology, but Chinese companies are even starting to look at the Japanese asset market.
The continued depreciation of the yen has made Japan's real estate and stock markets cheaper for Chinese investors who hold the renminbi.
According to incomplete statistics, since the depreciation of the yen, China's direct investment in Japan has increased by about 30%.
This indicates that Chinese companies and individual investors are taking a big interest in the Japanese market and are seizing the opportunity to expand overseas.
However, the impact of the yen's depreciation has not been entirely positive.
For those Chinese companies with a large number of operations in Japan, their revenue in Japan will be reduced due to exchange rate changes after being converted into RMB, which will put some pressure on the company's financial situation.
The continued depreciation of the yen could trigger policy adjustments in other major currencies around the world, a knock-on effect that could cause greater uncertainty and volatility in global markets.
Affected by the depreciation of the yen, the cost of living in Japan has risen, and the purchasing power of consumers has decreased, which has also indirectly affected Japan's demand for high-end consumer goods and luxury goods in China.
Sales of some high-end Chinese brands in Japan are starting to feel the pinch, and demand has decreased. Despite the increase in exports of general goods, the shrinkage of the high-end market is also a reminder of the diversification risks of Chinese companies in the international market.
The depreciation of the yen has affected the economic exchanges between China and Japan, and has caused a series of chain reactions around the world.
Other Asian countries, for example, have begun to pay attention to the movement of their currencies against the yen, fearing that a similar depreciation could affect the competitiveness of their exports.
In the yen-induced economic shock, China seems to have made a lot of money in the short term, but it has also exposed the risk of over-reliance on one market for foreign trade.
For the average consumer and investor, understanding the impact of currency exchange rate changes on international trade and investment is also an important aspect of improving one's economic resilience.
In such a situation, decision-makers and market participants need to remain vigilant and adjust their strategies reasonably to respond to any market movements that may arise.
The financial turmoil triggered by the yen has undoubtedly brought new challenges and opportunities to the global economy.