The Japanese yen has plummeted! Set a new low this year! What is the situation?
On the morning of September 6th, the Japanese yen exchange rate fell to 147.81 yen per US dollar, setting a new low since the beginning of this year. Compared to the end of July, the depreciation of the Japanese yen against the US dollar reached 7%.
The widening US Japan interest rate spread and Japan's trade deficit have led to a decline in the Japanese yen
The main reason for this round of yen decline is the rise in long-term interest rates in the United States, and market investors are concerned that the United States will continue to tighten monetary policy under inflation. The significant policy difference between the United States and Japan has led to an widening interest rate spread between the two countries. In addition, Japan continues to experience a trade deficit. As of May this year, Japan's trade deficit lasted for 22 months. After a brief surplus in June, the deficit reappeared in July. The combination of various factors has led to the depreciation of the Japanese yen.
The depreciation of the Japanese yen drives up domestic gold and oil prices in Japan
Affected by the depreciation of the Japanese yen, the price of gold denominated in yen in Japan continues to rise. The latest data released today shows that the retail price of Japanese gold has risen to a historic high of 10105 yen. As of yesterday, domestic gold futures prices in Japan have also hit new highs for two consecutive days. In addition, the average retail price of regular gasoline in Japan has reached its highest level since comparable data is available. According to estimates, nearly 80% of the increase in gasoline prices in Japan is due to the depreciation of the Japanese yen.
Multiple financial institutions have successively lowered their expectations for the Japanese yen exchange rate
In the face of this round of yen depreciation trend, according to the Nihon Keizai Shimbun, many financial institutions at home and abroad have recently lowered their yen exchange rate expectations. Among them, some institutions have significantly lowered their expectations for the Japanese yen exchange rate at the end of this year from 142 yen to 152 yen per dollar, which will be lower than last year's lowest point. Whether the Japanese government will enter the market to intervene in the exchange rate in the future has become a key concern for market investors.
