The recent spike in the yen exchange rate was a real surprise, and the sudden breakthrough to 160 was undoubtedly a huge shock to many. The Bank of Japan also reacted quite quickly, and they immediately intervened in the market to try to stabilize the exchange rate and prevent further volatility.
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Honestly, while it may seem effective in the short term, in the long run, the natural forces of the market are likely to continue to drive the exchange rate to fluctuate. For ordinary residents in Japan, this rapid change in the exchange rate has had a significant impact. The depreciation of the yen has led to an increase in the cost of living and a decrease in purchasing power, especially for goods and services that depend on imports, and prices have risen again and again.
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For Japanese exporters, the decline in the exchange rate has indeed brought some benefits. Their products have become more price competitive in the international market, potentially increasing sales. But this is not good news for domestic consumers.
In the final analysis, the actions of the Bank of Japan and the Ministry of Finance this time feel like they are trying to find a balance. They are also caught in stones and hard ground, on the one hand, they have to stabilize the exchange rate so that the common people do not suffer too much, and on the other hand, they have to take advantage of the benefits of this depreciation to promote exports. This operation is no less difficult than walking a tightrope.
The ups and downs of the yen this time show that the globalized market is really not so easy to fight, and every small action may trigger a chain reaction. I hope that the Bank of Japan will have a more precise response strategy next time, after all, the stability of the yen is not just about numbers.