2022-09-23|来源:多特软件

The continued depreciation of the yen or deterioration of the economic outlook, and the impact of the continued depreciation of the yen on the Japanese economy

Abstract:

According to a recent report by the Japanese Economic News, if the exchange rate of 1 dollar to 140 yen is calculated, Japan's nominal GDP is expected to be less than 4 trillion dollars for the first time in about 30 years in 2022. The continued depreciation of the local currency worsens the economic outlook. The Nikkei average in US dollars has fallen by 20% so far this year.

Abstract:

According to the recent report of the Japanese Economic News, if the dollar is exchanged for 140 yen, Japan's nominal GDP is expected to be less than 4 trillion dollars in 2022 for the first time in about 30 years. The continued depreciation of the local currency worsens the economic outlook. The Nikkei average in US dollars has fallen by 20% so far this year. At this stage, the mid term average exchange rate is about 127 yen per dollar. However, if the yen continues to depreciate or hover at a low level, the probability of Japan's GDP falling below 4 trillion dollars this year or next will increase. In dollar terms, the Nikkei average index has fallen by 23% so far this year, which is expected to hit a new low since 2008 (42%) when the financial crisis broke out. For overseas investors, the value of Japanese assets is declining sharply. What is it about the continuous depreciation of the yen or the worsening of the economic outlook? Let's follow Xiao Bian to see.

The Japanese economy in dollar terms is shrinking. According to a recent report by the Japanese Economic News, if the value of 1 dollar is 140 yen, Japan's nominal gross domestic product (GDP) is expected to be less than 4 trillion dollars for the first time in about 30 years in 2022. The continued depreciation of the local currency worsens the economic outlook.

The Nikkei average index in US dollars has fallen by 20% so far this year. Wages also fell back to the level 30 years ago, reducing Japan's purchasing power and attractiveness to talents.

The Organization for Economic Cooperation and Development predicted that Japan's nominal GDP will be 553 trillion yen this year. If the exchange rate of one dollar to 140 yen is calculated, it will be 3.9 trillion dollars, which will be less than 4 trillion dollars for the first time since 1992. At this stage, the mid term average exchange rate is about 127 yen per dollar. However, if the yen continues to depreciate or hover at a low level, the probability of Japan's GDP falling below 4 trillion dollars this year or next will increase.

Yoshio Noguchi, Honorary Professor of Hitotsubashi University, Japan, pointed out: "The devaluation of the local currency will reduce the 'national strength'. Japan will be difficult to attract talents from overseas, and economic growth will be hindered."

If the exchange rate of one dollar to 140 yen is calculated, the average annual wage of Japanese people is 30000 dollars, which is back to the level around 1990. For foreign workers, the appeal of working in Japan is declining. Judging from the depreciation rate against the U.S. dollar so far this year, the Japanese yen is larger than the Korean won, and the average wage in U.S. dollars in Japan is basically the same as that in South Korea. In 2011, the gap between the two was twice that. If calculated at purchasing power parity that takes account of price differences, the situation has reversed.

reported that the rise in energy prices, which has impacted the world economy, has also caused a heavy blow to countries whose currencies have depreciated. The price of WTI crude oil futures in US dollars is now 13% higher than that at the end of last year. The price of crude oil futures (the most actively traded contract), calculated by the Tokyo Commodity Exchange in yen, rose 33%, more than the former.

The feature of the yen depreciation period in the past is that foreigners bet on the growth of corporate earnings and bought Japanese stocks, but now this trend has disappeared.

In dollar terms, the Nikkei average index has fallen by 23% so far this year, which is expected to hit a new low since 2008 (42%) when the financial crisis broke out. For overseas investors, the value of Japanese assets is declining sharply.

reporter Chungang

Source: Economic Information Daily

The continued depreciation of yen or deterioration of economic prospects Related reading:

"The third place in the world" hangs? The yen continued to depreciate rapidly, and Japan took action in the foreign exchange market after 24 years

Source: Global Times

[Yue Linwei, the special correspondent of the Global Times in Japan, Pan Xiaotong, Song Yi, the reporter of the Global Times] The continued rapid depreciation of the yen made the Japanese government and the Bank of Japan unable to sit still until now. On the 21st local time, the Federal Reserve announced a significant interest rate increase of 75 basis points. On the 22nd, the exchange rate of the yen against the US dollar fell rapidly to 145, forcing Japan to intervene in the foreign exchange market after 24 years. Since this year, the continuous depreciation of the yen has made Japan's gross domestic product (GDP) denominated in dollars fall below $4 trillion for the first time in 30 years, making Japan lose its position as the world's third largest economy.

After 24 years, Japan made a move to the foreign exchange market

According to the Japanese Economic News, the Japanese government and the Bank of Japan announced on the 22nd that they would intervene in the foreign exchange market by buying yen and selling dollars. This is the first time since June 1998 that the Japanese government intervened in the foreign exchange market. As a result, the yen's exchange rate against the US dollar strengthened and once rose to 141.

The continued depreciation of the yen or deterioration of the economic outlook, and the impact of the continued depreciation of the yen on the Japanese economy

[P Japanese Finance Minister Junichi Suzuki told the media earlier that the Japanese government paid close attention to the trend of the foreign exchange market. If the trend of yen depreciation continues, it will not rule out any options and take necessary countermeasures in the foreign exchange market. The last time Japan intervened in the foreign exchange market to sell dollars and buy yen was in June 1998, when the Asian currency crisis was at its worst. The last time Japan entered the market to sell yen was in November 2011.

Earlier, the Bank of Japan announced at the monetary policy meeting at the end of the day that the policy interest rate would remain unchanged at - 0.1%, and the yield target of 10-year Japanese government bonds would remain at about 0%. At present, Japan is the last major economy whose central bank is still in the negative interest rate range.

[P. After the Bank of Japan released the news, the yen exchange rate in the Tokyo foreign exchange market fell to 145 yen per dollar, a new low in 24 years.

Bank of Japan Governor Kuroda said at the press conference after the monetary policy meeting that Japan's financial policy does not target the exchange rate, and stressed that it will not increase the exchange rate of the Bank of Japan. For the current negative interest rate policy in Japan, Kuroda believes that it will not cause major side effects or problems.

In the face of the rapid depreciation of the yen, Kuroda said: "There are many factors that affect the exchange rate. The reasons for the depreciation of the yen are both unilateral and speculative. The continuous depreciation of the yen makes it difficult for enterprises to formulate long-term development plans, but also increases the uncertainty of the economic outlook, which is negative for the Japanese economy." Kuroda also believes that it is necessary to pay full attention to the impact of financial and foreign exchange market trends on Japan's economy and prices.

"The third place in the world" is suspended

Affected by the continuous depreciation of the yen, Japan's GDP in dollars has fallen back 30 years ago. A few days ago, the Japanese Economic News quoted the prediction of the Organization for Economic Cooperation and Development (OECD) that Japan's nominal GDP this year is expected to be 553 trillion yen, 3.9 trillion dollars in dollar terms, roughly equivalent to Germany, which ranks fourth. The size of Japan's economy may be below $4 trillion for the first time since 1992. If the yen continues to depreciate or hover at a low level, Japan's GDP will still be below 4 trillion dollars next year.

During the 42 years from 1968 to 2009, Japan has always ranked second in the world GDP ranking, second only to the United States. In 2010, China's GDP exceeded Japan's, and Japan remained the third largest in the world for the next 12 years.

According to the analysis of Japanese economic analyst Akihisa, at present, Japan's third place in GDP is in danger. According to the ranking of global GDP in 2021, the gap of economic scale between Japan, the third largest country, and Germany is only 17%.

Bird Yuxian predicted that the European Central Bank will continue to raise interest rates in the second half of 2022, while the Bank of Japan has always maintained a loose monetary policy. In this case, the depreciation of the yen and the appreciation of the euro will continue in the future. If the depreciation of the yen exceeds the key point of 1 euro to 150 yen, Japan's GDP will fall to the fourth place in the world. At present, Germany's total population is about 83.88 million, and Japan's total population is about 125.58 million. If the per capita GDP is compared, Germany is nearly 15000 dollars higher than Japan.

The trade statistics of August released by the Ministry of Finance of Japan on September 15 showed that, due to the high energy prices and the depreciation of the yen, Japan's trade deficit in August was 2817.3 billion yen, the largest monthly deficit in history since 1979. This is the 13th consecutive month that Japan's balance of international trade has been in deficit.

The report shows that due to the soaring international energy prices and the devaluation of the yen, especially the significant growth in the import of coal, liquefied natural gas, crude oil and other energy, Japan's import volume in the same month increased by 49.9% to 10.88 trillion yen year-on-year, surpassing the same period of the previous year for 19 consecutive months, a record high.

At the same time, exchange rate fluctuations have also brought another hidden danger to the Japanese economy. According to the report of "Asian News Network" on the 21st, with the Federal Reserve raising interest rates, "boots fall", the huge funds held by Japanese families are at risk of flowing overseas. The report quoted the chief foreign exchange and interest rate strategist of the Bank of America in Tokyo as saying that the yield difference between the two foreign exchange markets of the United States and Japan is very large, which will stimulate institutional investors and retail investors to buy and hold dollars. Japanese households have 1000 trillion yen worth of savings, even if 0.1% of the "flight" will have a certain impact on the Japanese economy.

reported that Japanese households' savings have been increasing, while the yen has been weakening since this year, and the exchange rate of the yen against the US dollar has fallen by 20%. Japan market research director of JPMorgan Securities in Tokyo said that the increasing risk of Japanese family capital flight should cause concern of the Bank of Japan. The director believed that the rapid expansion of Japan's trade balance to a record deficit, the unprecedented weakness of the yen exchange rate, and the gradual loss of purchasing power of the public made the Japanese public feel that they need to hold some foreign currencies to avoid a series of risks caused by the weak yen to the maximum extent.

Gaitame, a retail investment research institution The head of the com department said that at present, Japan still maintains a negative interest rate, which is "a very favorable environment for capital flows overseas".

National competitiveness is likely to decline

On the 21st, Murakami Denying, an economist at Nomura Institute of Comprehensive Research, commented that Japan was suffering from the historical depreciation of the yen. Usually, yen depreciation will help export enterprises improve their international competitiveness, but individual consumers will have to bear the pain of high prices. As a result of the interest difference between Japan and the United States, "Japan (yuan) is cheap and the United States (yuan) is expensive" will continue for a long time, and high prices will also become a long-term trend.

Edano Dazuo, chief foreign exchange strategist of Mitsubishi UFJ Morgan Stanley Securities of Japan, said in an interview with the Japanese Economic News earlier that the last significant depreciation of the yen was in 1998. Affected by the financial crisis, the capital market was heavily "short selling Japan", which led to the constant depreciation of the yen. This time, the yen depreciated against the background of stagnant Japanese exports, which reflects that Japan's essential competitiveness as a country is declining.

Akira Mizuno, president of the Central Japan Economic Federation, said earlier that the depreciation of the yen was not entirely good for export enterprises. Mizuno said: "It can't be seen that with the depreciation of the yen, Japan's exports have increased significantly. Moreover, due to the restriction of chips and parts, a large number of enterprises in Japan's automobile and other manufacturing industries are unable to produce from time to time. Although many views believe that export enterprises will benefit from the depreciation of the yen, it is difficult to say that the depreciation of the yen has brought a wide range of positive effects."

Minjiu Shuino also believes that, from the perspective of enterprises, excessive fluctuation of the yen exchange rate will bring uncertainty to the development planning of enterprises. In order to stabilize the exchange rate, it is hoped that the government will take relevant measures and study providing support to those enterprises that cannot enjoy the dividend of yen depreciation.

Chen Yan, executive director of the China Research Institute of Japanese enterprises, said in an interview with the global times on the 22nd that under normal circumstances, the depreciation of the yen is beneficial to overseas tourists traveling to Japan, but due to the impact of the COVID-19, Japan's tourism industry has not recovered and developed as expected. At the same time, due to the soaring global energy prices, the frequent interest rate hikes by the Federal Reserve have caused Japan's inflation rate to hit new highs, leading to soaring domestic prices and offsetting the export competitiveness brought about by the weakening yen. High production costs and weak purchasing power are unfavorable for Japanese enterprises.

Chen Yan believes that the weakening of the yen means that its economic index denominated in dollars is under pressure, and the gross domestic product will shrink significantly. If Japan wants to enhance its national strength and restore its economic prosperity, it can change from two aspects: one is to reform its administrative system; The second is to carry out technological innovation, promote the development of high value-added industries, pay attention to innovative breakthroughs in high-tech fields, and guide the yen to strengthen.