The Japanese Yen's Crazy Depreciation Is A Japanese Attack On China.

< p > second weeks in April, < a > yen exchange rate > /a > sharp fluctuation, once broke through 100 yen to 1 US dollar mark, reached 105 yen to 1 US dollars. Compared with 78 yen to 1 dollars at the end of December 2012, however, in just a few months, the Japanese yen depreciated by 22%. This is the case for the Japanese yen against the US dollar, and the yen is more obvious against the renminbi. Since October 2012, the appreciation rate of RMB to Japan has exceeded 25%. < /p >
< p > this kind of short time crazy devaluation rate can only be seen only after the outbreak of many global financial crises after World War II, especially for a safe currency like yen. < /p >
< p > since Abe Shinzo became prime minister in October 2012, the Bank of Japan has launched an "open-ended" loose monetary policy, hoping to get rid of deflation and enhance export competitiveness. Since last September, the exchange rate of the Japanese yen against the US dollar and RMB has depreciated by 22 to 25%. The devaluation of the yen is the first to put pressure on countries that export export-oriented economies. Japan's neighbours, China and South Korea, bear the brunt of the impact. < /p >
< p > because China and Korea and other Asian countries are unwilling to see the Japanese yen devaluing wildly, the Bank of Japan once thought that the yen exchange rate would be stable at 1 US dollars to 88 to 98 yen. But the Japanese central bank has adopted an "open-ended" loose monetary policy, which will drop to 105 yen to 1 dollars in the near future. Although it is not certain whether the yen will further depreciate, observers say that the possibility of falling to 120 yen this year to cash the US dollar is very high. < /p >
< p > this is a bad news for China. If the trend of "a href=" http://sjfzxm.com/news/index_c.asp > Japanese yen depreciation "/a >" continues, Japanese commodities will substantially reduce prices, and Japan is likely to become China's largest source of imports rapidly. In contrast, China's trade competitiveness will inevitably decline. < /p >
< p > RMB will rise by more than 25% against the Japanese yen, which will roughly correspond to the real effective exchange rate of China's rise of about 1.5%, which may cause China's actual exports to drop by about 2.5 percentage points. Moreover, the depreciation of the yen will make China's entire exports face greater challenges. In the past, China and Japan were complementary countries in the industrial chain. China mainly exported low-end products, and Japan mainly exported high-end products. < /p >
< p > for example, the depreciation of the Japanese yen has a great impact on China's exports in the fields of color TV, DVD, communications equipment, rebar, hot rolled products, stainless steel and so on. In July 2012, a survey by Japanese trade institutions showed that China's export competitiveness of color media, DVD and other recording media and communications equipment exceeded Japan's. But now, with the depreciation of the yen and appreciation of the renminbi, the export competitiveness of these two products will have the same effect. < /p >
What is more important is that the devaluation of the Japanese yen will greatly shrink the holdings of Japanese government bonds in P. As we all know, China surpassed the United States and Britain in 2010 and became the largest overseas holder of Japanese government bonds. According to data released by Japan's Ministry of Finance and the Bank of Japan in June 2012, as of the end of 2011, China's holdings of Japanese government bonds (including short-term treasury bonds) have increased to about 18 trillion yen (about 14590 billion yuan), an increase of 71% over 2010, a record high. < /p >
In addition to the Japanese government bonds purchased by China, China's investment institutions also bought a lot of Japanese stocks, with a size of about 50 billion US dollars (about 312 billion yuan), mainly from China Investment Corporation (P). Because of the depreciation of the yen, the money will also be locked up unless the yen returns to 78 yen to 1 US dollars again. < /p >
< p > analysts believe that Japan has already taken the lead in strengthening China's precious external reserve capital. In particular, the devaluation of the Japanese yen is likely to result in a 30% to 35% reduction in China's holdings of Japanese government bonds this year. If the Japanese government bonds held by China or the shares held by CIC leave, it will mean a loss of 50 billion US dollars (or more than 312 billion yuan). < /p >
< p > recently, although China and Korea and other Asian countries have condemned the devaluation of the Japanese yen, they have always been "a href=" http://sjfzxm.com/news/index_s.asp "economic < /a > animals". The Japanese are still calm about it, saying that as long as the exchange rate is still the basic reflection of the current economic situation in Japan, no intervention measures will be taken. Kuroda Higashihiko, the governor of the Bank of Japan, said that the plan would take about two years to achieve the 2% inflation target through bold monetary easing in terms of quantity and quality, and the continued depreciation of the yen. < /p >
"P > Japan's action is undoubtedly a sneak attack on China's economy. The devaluation of yen and even the impact on China's economy are bigger than that of the Diaoyu Islands issue. < /p >
< p > the Japanese know very well that since 2012, China's economic growth has been slowing down. In order to stimulate foreign investment, the Central Bank of China must keep the RMB stable. While Japan has devalued the yen, while China has kept the renminbi unchanged, the renminbi will soon become overvalued. After all the currency overestimates, China will have to bear it and its competitiveness will be severely suppressed or weakened. < /p >