Xu Yaxin Talked About The Evolution Of The Yen Exchange Rate

After the end of the Second World War, the political and economic structure of the world was rearranged, and the United States became the No. 1 power without controversy. It also built the "Bretton Woods system" centered on the dollar, namely, the linkage between the US dollar and the gold, and the exchange rate regime of most other countries.

Japan's exchange rate can be divided into two stages, one is the fixed exchange rate system, that is, after the Second World War to around 1970, the exchange rate of the yen against the US dollar is basically fixed at a level of 360 to 1, and the other is the floating exchange rate system. Since 1971, the exchange rate of yen against the US dollar has begun to fluctuate, that is, the so-called exchange rate marketization can basically be summed up as the four round of appreciating appreciation.

　　 From 1949 to early 70s: Dodge plan and fixed exchange rate

In 1949, due to Japan's persistent inflation and multiple exchange rates, the United States helped the Japanese authorities to develop the so-called dodge plan and the nine principles of economic stability, and fixed the yen to the US dollar at 360 to 1. The exchange rate policy finally stabilized Japan's economy, which not only made Japan's foreign trade activities easier to liquidate and settle, but also deepened Japan's ties with the international economy through the binding of the yen and the US dollar, and finally allowed the Japanese industry to return to the international market. The system of fixed exchange rates has been implemented until February 1973. We can see from the statistics of Japan's economic growth that the current exchange rate regime has brought much impetus to the recovery of Japan's economy.

　 From 1971 to 1978: Nixon's impact and floating exchange rate

From October 1960 to the second half of 1972, four large-scale US dollar crises broke out. Although the United States and the major developed economies have adopted a series of rescue measures at the time of the outbreak of the crisis, the fate of the Bretton Woods system is still unable to recover.

In August 5, 1971, due to the continued depreciation of the US dollar, then US President Nixon was forced to announce the suspension of the fixed exchange rate between us dollar and gold (1 ounces of gold =35 US dollars) and levy 10% import tax rate, known as "Nixon shock". With the depreciation of the US dollar, the fixed exchange rate of the yen against the US dollar fluctuated from 360 to 306.

In February 1973, the yen officially shifted from a fixed exchange rate system to a floating exchange rate system. Subsequently, the Japanese yen continued to appreciate against the US dollar. At the end of 1978, the exchange rate rose to 194.3 to 1, and the cumulative appreciation in the seven years was as high as 85.28%.

　　 From 1985 to 1987: Plaza Agreement and land financing restriction.

This is a very critical two years. Besides the square agreement with a strong historical aura, the author of this article finally came to the world very hard and survived unusually. Otherwise, where do you read such articles today?

In September 1985, the United States, Japan, the former Federal Republic of Germany, France and Britain, five finance ministers of the developed industrial countries and five central bank governors held a meeting at the New York Plaza Hotel to reach the five governments' joint intervention in the foreign exchange market, so that the US dollar and major currencies could be cut down orderly, so as to solve the huge trade deficit agreement of the United States, and finally made the Japanese yen appreciate substantially, known as the Plaza Accord.

Despite the seemingly unscrupulous behavior of the powers, the square agreement also opened the prelude to the rapid appreciation of the yen in the world where the fist is the big reason. In September 1985, the Japanese yen fluctuated against the US dollar at 250 to 1. In the less than 3 months after the entry into force of the Plaza Accord, the value of the yen rose rapidly to 200 to 1, 20%. Perhaps we can get a clearer picture of the power of the US financial atom bomb from the following table.

The above statistics show that in the nominal exchange rate, the Japanese yen appreciated by 111% from February 1985 to November 1988, and appreciated by 89% from April 1990 to April 1995, and 41% from August 1998 to December 1999. On the real exchange rate, the Japanese yen appreciated by 54% from the first quarter of 1985 to the first quarter of 1988, and appreciated by 51% from the second quarter of 1990 to the second quarter of 1995. The value of the Japanese yen increased by 28% from the third quarter of 1998 to the fourth quarter of 1999.

　　 Yen Unilateral persistence appreciation Soon, and the export enterprises to Japan, the entire Japanese export industry chain collapsed, which also led to the Bank of Japan's four consecutive downward discount rate. The downward trend of the benchmark interest rate drove Dalian's capital into the stock market, real estate and other fields, thus forming the world-famous Japanese bubble economy in the 90 era. One of the most representative events is that the Japanese MITSUBISHI group has bought the national symbol of the United States, Rockefeller Center.

In April 1990, the Japanese Ministry of land issued the "land financing restrictions", strictly prohibit the use of land as an asset mortgage loan and listing financing, and strictly prohibit developers from issuing bonds, thus preventing the further spread of the bubble. However, the "Land Financing Restriction" also led to the collapse of the bubble economy. After the economic bubble burst in 1991, the Japanese economy plunged into the biggest recession after the war. It lasted for more than ten years, and the Japanese economy still did not get out of the shadow. This is known as "the lost ten years" in Japan.

Therefore, from this perspective, the great powers are shameless, but in the face of such a malicious neighbor, it seems that they still have to thank the Americans. Of course, in another way to think about it, we also need to thank Japan a bit. At least, Japan has experimented with its fearless spirit on the smell of the financial atomic bomb in the United States. Now we are faced with what Americans call the "serious underestimation of the renminbi".