Recently, the big news about the Japanese economy has been the sharp fall in the yen exchange rate to the level of 1986. This not only shocked the market, but also made the average household feel the increased pressure. Imagine having to face rising prices every time you go to the supermarket, and this economic pressure has already begun to affect daily life. The Bank of Japan (BOJ) has invested a huge amount of money in its bailout, but it looks like the battle for the currency is far from over.
The event passed
A few months ago, the yen began to destabilize against the dollar, which may have been a piece of news for many, but for the Japanese in our daily lives, it was a disaster. If you go to the supermarket, what you could buy for 100 yen can now cost 120 yen. The depreciation of the yen has a direct impact on everyone's wallet.
Why is the yen falling like this? First of all, we have to start with the policy of the Bank of Japan. Over the years, in order to stimulate economic growth and avoid deflation, the Bank of Japan has implemented a policy of ultra-low or even negative interest rates. It sounds like a good policy, reducing borrowing costs and boosting consumption and investment. But in fact, this makes the yen less and less attractive on the global market.
In addition, the global economic environment is not very peaceful. You think, the trade war between China and the United States, the conflict between Ukraine and Russia, these have made the global economy full of uncertainty. In this case, a lot of people and institutions would rather put their money into the dollar, which looks more stable.
And the United States has done the exact opposite, in order to curb inflation, the United States has been raising interest rates. High interest rates mean that it is more profitable to hold the dollar. This creates a stark contrast: everyone is selling the yen and buying the dollar.
By the end of April and the beginning of May this year, the situation had taken a turn for the worse. The Japanese government and central bank saw that the yen was getting lower day by day, so they decided to intervene. They have used a whopping 9.8 trillion yen in the hope of stabilizing the exchange rate. But the market's reaction was to be a cold sidestander, even a little mocking. Investors are not buying it, believing that Japan's intervention will only work if the Fed changes policy.
Historically, Japan has tried similar loose monetary policy in 2000 and 2006, but each time it has not worked as well as expected. The market has lost confidence in these moves by the Bank of Japan. Even a major institution like Deutsche Bank mentioned in their research report that although the Bank of Japan is expected to raise interest rates slightly this year, this will do little to reverse the depreciation of the yen.
The lives of ordinary people have been directly affected. For example, my neighbor, Mr. Ono, runs a small import goods store. With the depreciation of the yen, the cost of his goods is getting higher and higher, and customers are losing due to the increase in prices. He even fears that if this continues, his shop may close its doors.
Not only Mr. Ono, but also many ordinary families are feeling the pressure of the cost of living. Prices of imported goods have skyrocketed, energy costs remain high, and many people have had to cut back on their basic living expenses. This economic pressure weighs on people's hearts like a boulder, suffocating.
Faced with this situation, the Japanese government and the central bank are working hard, but the people's trust in them is gradually declining. A sense of policy powerlessness and frustration spreads through society. Every time the yen's exchange rate falls, it is like a reminder that the future is more elusive.
Under this economic pressure, netizens have also reacted in a variety of ways, expressing their opinions and feelings on social media and various forums. Here's what they have to say:
Komatsu: "Every time I see the exchange rate news, my heart is a little cold. Wages haven't risen, things have risen vigorously, and this kind of life is really difficult. ”
Michiko: "The government's bailout measures sound like a big deal, but how does it feel like a stone thrown into the water, stirring up a little wave and then disappearing?" We ordinary people still have to figure it out for ourselves. ”
Takahashi: "The Bank of Japan is really too conservative, and every time it is a small intervention, can it work well?" Look at the Federal Reserve, that's called a decisiveness! ”
Sakuragi: "To be honest, I'm a little scared to go to the supermarket now, the price is different every time, and I feel like my wallet is getting flatter. ”
Sato: "I'm in a small business, and as soon as the exchange rate drops, the cost of purchasing goods will go up, which is really choking." The customer is not a fool either, and runs away as soon as the price rises. ”
Naoko: "Foreign currency deposits seem to be much more reliable than yen deposits, so changing dollars or euros is also one of the strategies. ”
Ito: "Do you think that we ordinary people are actually the biggest losers?" After so many years of monetary policy, I don't feel that I have benefited much from it, but the cost of living has risen. ”
Koizumi: "To be honest, I've started shopping overseas online, and it's expensive to buy locally anyway, so it's better to buy foreign ones directly, although there is a shipping fee, but sometimes it's cost-effective." ”
Harada: "Every time the central bank says it's going to intervene, I want to know what their plan is. It felt like we were doing useless work, and it didn't help us little characters. ”
Nakamura: "I wish the government would come up with more practical measures to help ordinary families like us, and not just patch the exchange rate." ”
Through these comments, we can see how ordinary people actually feel and react to the depreciation of the yen and government interventions. They generally feel the increase in the cost of living and economic pressure, and are skeptical or even disappointed by the measures taken by the government and the central bank. This widespread unease and dissatisfaction reflects the contradiction between current economic policies and the growing cost of living for ordinary people. For them, more direct and effective support measures are clearly more urgent and necessary.