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In March this year, the Bank of Japan suddenly announced that it would no longer implement a negative interest rate policy, and the interest rate was adjusted to almost zero interest rates.
The last time the Bank of Japan raised interest rates was 18 years ago, and even though the United States continued to raise interest rates, the yen exchange rate continued to fall, and the Japanese government remained indifferent.
Even before some officials came out to warn, the Japanese side will take necessary measures to improve the problem of the decline in the yen exchange rate.
Judging from the recent situation of the Japanese exchange rate, this situation has not been effectively contained, nor has it prevented further depreciation of the yen.
In particular, recently, the yen exchange rate has fallen again, reaching its lowest level in more than 30 years.
The fundamental reason for the current embarrassing situation of the yen exchange rate is that Japan has maintained zero negative interest rates.
In order to harvest global wealth, the United States has used the hegemony of the dollar to launch a series of interest rate hikes. At present, the exchange rate of the dollar has reached a very high level, but the US government has not stopped the policy of continuing to raise interest rates.
Against the backdrop of the strengthening of the US currency, the exchange rate difference between the yen and the US dollar is getting wider.
Against this background, the United States will be able to harvest Japan with ease, attracting a large amount of capital to flow out of Japan, and this capital will enter the arms of the United States.
Judging from the data released by professional institutions, the yen will depreciate again as the exchange rate difference between the yen and the dollar continues to increase.
At the beginning, the United States introduced a policy of raising interest rates, claiming that this was to alleviate the impact of inflation, but judging from the inflation data in the United States in March, it has declined, but the US government did not cut interest rates as previously stated.
On the contrary, the policy of interest rate cuts continued to be postponed.
Recently, the U.S. government has been planning to raise interest rates and start a new round of interest rate hikes. Against this backdrop, the Japanese government has not taken any measures, and the yen has already shown a weakening state.
In fact, after the Federal Reserve launched the interest rate hike policy, many countries have implemented interest rate hike policies.
Avoid the negative impact of the appreciation of the dollar on the national currency and reduce the magnitude of the currency decline.
Especially in the context of the financial turmoil that continues to sweep across Asia, many Asian countries have been looking for strategies to solve the economic crisis, and at the same time proposed to raise interest rates.
In the face of a sharp drop in the exchange rate, why didn't Japan pursue a policy of raising interest rates?
Some analysts believe that the reason why the Japanese government has maintained no interest rate hikes or slightly raised interest rates in the face of the continuous decline of the yen is because the Japanese economy is currently in a relatively stagnant state.
In this situation, if the Japanese government pursues a policy of raising interest rates, it will only make Japan's economic development more difficult.
In fact, the Japanese government currently has a very serious debt risk.
If interest rate hikes are pursued regardless of these risks, it will only become more difficult for the yen to become liquid, and it may even lead to a decline in Japan's national income.
As a result, Japan's economy will enter a negative cycle. At that point, it will be even more difficult to improve the problem of economic stagnation.
It is precisely for this reason that while the United States has been pursuing interest rate hikes, Japan has not followed suit and has not chosen to pursue interest rate hikes.
This also fully shows that the Japanese Government attaches great importance to economic recovery and hopes to continue to implement measures for Japan's economic development on the basis of its original policies.
Although the Fed continues to pursue the interest rate hike policy, the impact on the U.S. economy is relatively large, and it may even lead to the U.S. falling into a state of recession. But the Fed took the risk of doing so, unlike Japan and the United States.
The Japanese government is well aware that the policy of raising interest rates will only plunge the Japanese economy into a faster recession.
Coupled with the fact that the Japanese government faces a huge debt risk, a recession is likely to lead to bankruptcy in Japan.
In view of the problems that Japan is currently facing, some analysts have pointed out that the Japanese government is not at a loss for what to do.
In the current volatile situation, in addition to pursuing interest rate hikes, the Japanese government can also alleviate the current pressure by selling US Treasury bonds.
After all, Japan has become the largest creditor of the United States, and it now holds the largest number of U.S. Treasury bonds in the world.
Under the harvest of the United States, Japan can completely alleviate the risk of being shorted by selling U.S. Treasury bonds and other means.
But as things stand now, not only have they not sold off US Treasuries, but they have even increased their holdings of US Treasuries several times in the past few months.
For the current Japanese government to solve the problems it is currently facing, it is necessary to consider comprehensive factors. This is the key reason why the Japanese government has not taken any action against the decline in the yen exchange rate.
What do you think about the collapse of the yen? Welcome to discuss in the comment area!