Before reading this article, I sincerely invite you to click the "Follow" button, so that you can continue to push such articles in the future, and it is also convenient for you to discuss and share, your support is the driving force for us to insist on creating~
Lead:
2024 in the financial sector can be described as a stressful year for Japan, and the depreciation trajectory of the yen is like a waterfall, and no one can stop it. In late April this year, what is surprising is that the dollar-yen ratio instantly rushed to an all-time high of 160. Since the beginning of 2021, the yen has depreciated by nearly 60%, which involves the acceleration of the depreciation of the yen, which has also directly affected the trend of Japan's GDP denominated in US dollars, but has shown a downward trend against the trend.
All these dramatic changes are closely related to Japan's continuous purchase of U.S. Treasury bonds. Every government bond purchased is like a heavy iron chain for the yen, making the yen move forward more and more under the impact of a strong dollar.
1. The continuous depreciation of the yen and the decline of Japan's economic status
For Japan, once the world's second-largest economy, 2024 will undoubtedly be a time of pressure. This year, the yen continued to fall, like the Taiping Heavenly Kingdom of the Tang Dynasty, and every layer was terrifying. So far in 2024, the yen has depreciated by more than 14%, leaving a striking mark on the declining yen in the long river of history. Since 2021, the yen has lost nearly 60% of its value, a situation that is like a world falling apart for a country like Japan.
The continuous depreciation of the yen, like the hanging sound of a bell, echoes in the ears of the global financial markets. The depreciation is not only a sign of Japan's domestic economic problems, but also a sign that the global economic landscape is changing. How much is this depreciation to the Japanese economy? Japan's GDP in dollar terms has fallen instead of increasing, and Japan's GDP has been counterattacked by Germany in 2023, falling into the fourth place in the world.
The frightening thing is that if the latest exchange rate is used, Japan's GDP has been overtaken by India and has fallen to the fifth place in the world. When you think about 2009, Japan was the world's second-largest economy after the United States, and the current situation is quite emotional.
So, what is the reason behind the continued depreciation of the yen and the decline of Japan's economic status? Is it only a gloomy conjecture as to how it will further affect the global economy? This is like a puzzle that is deeply rooted in everyone's heart.
What's even more worrying is that we can't give an accurate answer to this question. Recalling the light artillery bombardment of the glorious Edo Castle, it reflects the remarkable history of the yen overturning. What kind of storm is hiding in the back?
2. Asia's currency defense and the challenge of the dollar's "hegemony".
The horn of war has been sounded, and on the battlefield of Asian currencies with a strong smell of gunpowder, currencies such as the Japanese yen, South Korean won, Indonesian rupiah, and Thai baht are undergoing an unprecedented severe test. They are facing tremendous pressure, the world is moving, the sun is no longer shining, and the "hot potato" in the pots and cans are all coming to trouble Asia.
Devaluation, a seemingly simple word, is like a huge wave in the big chess game of the global financial market, causing countless ripples. Who is the driving force behind the depreciation of these currencies? I saw a figure coming out of the fog, and that was the eagle that had been hovering over the financial world -- the US dollar. The high interest rate in the mouth is like sharp fangs, and the corners of the mouth are flowing with global financial blood. This is his strategy, to hold the depreciation of these Asian currencies in the palm of his hand and gently absorb them.
In the crowded financial market, Asian countries such as Japan and South Korea have suffered tremendous economic damage because of the long-term implementation of the US financial strategy. Their position is like that of a lamb called a sacrifice, with the helplessness of buying dollar debt on the one hand, and the devaluation of the national currency that brings about great changes and turmoil in life on the other. The price of materials has skyrocketed, and the depreciation of the yen has brought the dollar to a high level against the yen, but 79 yuan can only buy a cabbage. This kind of "sky-high dish" is like the sound of war drums under the horn, constantly echoing in the hearts of the Japanese people, making people unable to let go.
Faced with such a predicament, is it true that Japan and other Asian countries are helpless? What enlightenment can the consequences of this financial turmoil give us? Those brave and resolute steps, step by step, stepped on the thick smoke of war, clenched their fists, but never closed their eyes. Imagine what kind of light will be ushered in when this seemingly difficult battle for currency defense finally wins?
The predictions of international investment banks such as Morgan Stanley are sharp weather vanes and point out the way ahead. So, which eagle will fly high and which will fall off the altar?
3. Japan抛售美债拯救日元的背后策略
In the midst of this seemingly deadly currency war, Japan suddenly made waves. Saying goodbye to silence, the day of breaking the game finally came, and they decided, no longer sinking, they chose to stand up. With a determination to reinvigorate, they embarked on a fierce strategy of selling US bonds and buying yen. This move, like a bolt of lightning piercing the sky, a trace of splendor, lit up the top of the dark clouds.
From the yen with thousands of arrows piercing the heart, to the weak South Korean won, and then to the Indonesian rupiah, which is a miserable "shield", this tragic song guided by the dollar seems to have found some kind of turning point in Japan's slightly poignant resistance. What Japan did was like pouring a basin of frozen water on the trembling yen, making it sober up in an instant. The yen appreciated by more than 5% in three days, as if a faint glimmer of light had been found in the endless darkness.
So can this "breakthrough" be the key to opening a new world for the yen around the green forest? In fact, the strategy behind it is not simple, and this is a risky investment like a gamble. In this wave of operations, Japan sold a total of $60 billion, which is not a small amount, but what was the result? The yen appreciated sharply, and the exchange rate of the dollar against the yen fell instantly. It's like playing a big gamble, the winner is king, the loser is the loser, and Japan has the last laugh in the casino.
What will be the consequences of this big gamble? What kind of impact will this kind of gambling have on Japan, and even on the global financial market? And where will Japan's bet come from? The answer to this question may not be so intuitive. According to the predictions of well-known international investment banks, in order to save the yen, Japan is ready to invest at least more than 200 billion US dollars to stimulate the appreciation of the yen, and the source of these dollar funds is mainly obtained through the sale of US bonds, because the sale of US bonds is also conducive to the depreciation of the US dollar.
Some say it's the yen's nirvana, others say it's the defense of Asian currencies, and others say it's a challenge to the dollar's hegemony. But whatever the outcome, we must face the fact that the yen, as well as other Asian currencies, are undergoing painful and joyful reforms.
4. China's role and influence in the Asian currency war
When the storm of global financial markets swept in, Asia was in darkness. At this time, a lighthouse stood proudly in the wind and rain, and the name of that lighthouse was China. You read that right, it's China. In this financial war, it faced it calmly with a firm attitude. Its movements, like the spearhead of the king of the sea, are directed at the wind, and its impact is like a rainstorm that causes a waterfall and a cliff to repent, alarming the world.
Indeed, there are numbers that do the talking. According to the U.S. Treasury Department, China is already the largest foreign holder of U.S. Treasury bonds, with a total holding of $1.1 trillion. The amount involved in China's sell-off of U.S. bonds has reached tens of billions of dollars. Some people say that China wants to start a war against the yuan, and some people say that China wants to fight against the hegemony of the dollar. Essentially, China's strategy is clear: to pursue long-term economic stability while minimizing its dependence on U.S. economic risks.
Is this China's strategy to sell US Treasury bonds, trigger the depreciation of the renminbi, and then open the door to global currency depreciation? China's lone dance on the financial battlefield is still so calm, although it is thunderous. This has shown China's huge influence in the global economic drama.
Epilogue:
Now that Japan has recognized the crisis, it has begun to give up its US debt to save its depreciating yen, which is undoubtedly a wake-up call. As Japan changes, other countries will inevitably respond, and the same actions will follow.
China, a giant that has long anticipated the changes, has begun to move earlier and reduce its dependence on U.S. Treasuries. How can China be absent from this Asian currency war?