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In recent years, Japan has been leaning toward Americanization in its foreign policy.
Through the protection of the United States, we are trying to create good conditions for promoting the development of the Japanese economy and other fields. Against the backdrop of Japan's constant cooperation with the United States, it has become the most loyal ally of the United States.
Not long ago, Japanese Prime Minister Fumio Kishida went to the United States to talk to Biden in person.
However, not long after this meeting, Biden gave Japan a big gift. Under the influence of the US dollar's interest rate hike policy, the yen exchange rate has fallen rapidly, and has now reached the worst record in more than 30 years.
As the exchange rate gap between the Japanese and U.S. currencies widens, the value of the yen decreases further.
In the current turbulent financial markets, any small fluctuation will attract a lot of attention from investors. And in the case of a large depreciation of Japan's currency, it will naturally cause speculation and analysis from the outside world.
As the world's No. 1 economy, the U.S. has not been doing well in recent years.
The growing inflation problem, coupled with the US fiscal deficit and the growing size of the debt, has further exacerbated the complexity of the global economy.
The current economic recovery across the globe is uneven.
In response to the current economic pressures, the Federal Reserve has raised interest rates several times since 2022. And this policy has dealt a clear blow to the value of the currencies of other countries.
It was originally planned to introduce a rate cut in March 2024, but the Fed has not acted in this direction recently, and has instead further contributed to the value of the dollar.
Against this backdrop, the yen exchange rate fell to a new low. More and more economists and capitalists are beginning to pay attention to the Japanese market, and some have even proposed Japan.
In terms of foreign exchange reserves, there is a huge amount, and a large part of them are US national debt. In the context of this currency war, the United States has set its sights on Asia, especially China.
The United States hopes to alleviate the various economic problems it is currently facing by harvesting the economic wealth of China and some other Asian countries.
Because the mainland's economic development has been very positive in recent years, and the mainland has already taken corresponding countermeasures, the mainland's currency has remained relatively stable under the sweep of the monetary financial crisis.
Seeing that the harvest of China's economic wealth could not be achieved, the United States turned its attention to Japan.
Although Japan is an ally of the United States, in order to ensure the interests of the United States, the US Government has ruthlessly attacked Japan.
Under the impetus of the U.S. government, the yen's exchange rate has not only fallen, but the value of the yen has gradually weakened, further exacerbating Japan's economic instability.
The declining exchange rate and value of the yen has led to a large amount of capital flight, which will be a big blow to the Japanese economy.
However, in the face of the constant challenges of the exchange rate, the Japanese government has not taken any measures, but has maintained sufficient calm.
Some analysts believe that the most important thing for the Japanese government to do now is to reduce the US debt, after all, Japan has now become the country with the largest holdings of US debt in the world, with $1.2 trillion.
Why hasn't Japan sold U.S. Treasury bonds, and why hasn't it sharply adjusted interest rates?
In the case of a sharp decline in the yen exchange rate, Japan can use the U.S. bonds in its hands to exchange more yen, so that it can also make a profit.
However, judging from the latest data, Japan has not only not reduced its holdings of U.S. bonds, but has increased its holdings of U.S. bonds. Why is Japan doing this?
For a long time, the global dominance of the dollar was unshakable, and it is precisely because of this that the influence of the dollar has continued to this day.
Japan is currently ranked as the world's fourth largest economy, and Japan's economic development is actually very closely related to export-driven, coupled with Japan's high economic dependence on the United States.
At this time, if Japan sells US bonds, it will also mean that Japan will reduce its dependence on the United States in terms of economy.
As for the United States, in the current situation of intensifying economic risks, it is also necessary for Japan to continue to hold a large amount of U.S. bonds, so as to help the United States stabilize the economy and reduce the impact of the economic crisis on the United States.
If Japan reduces its U.S. debt by a large amount at this time, it will inevitably cause panic in the entire U.S. bond market and further lead to the depreciation of U.S. debt. Under such circumstances, it will inevitably affect relations between the United States and Japan, and may even trigger an all-out attack by the United States.
In fact, the decline in Japan's exchange rate is actually the result that the Japanese government and central bank want to see. This is because the export-led economy is expected to grow rapidly as Japan's exchange rate declines.
By holding U.S. bonds, Japan can well mitigate the impact of the current depreciation of the Japanese currency. However, in the case of holding a large amount of US bonds, a vicious circle will inevitably be formed, which will affect the long-term development of the Japanese economy.
What do you think about the fall of the yen exchange rate? Welcome to discuss in the comment area!