The currency wars began 40 years ago, and the dollar became the ultimate reaper. Japan, once the world's second-largest power, has endured the challenges and defeats of currency wars and is still bearing the cost. After nearly 30 years of negative growth, Japan's economy has been sluggish. And now, with the continuous interest rate hike of the US dollar, the yen exchange rate has been sharply**, and the economic situation is even more severe. However, it is worth noting that Japan has shown some "god-like" maneuvers in the current situation, which makes people look forward to the future trend.
Japan's rapid economic growth 40 years ago threatened the United States. To this end, the United States took advantage of the imbalance caused by the depreciation of the yen to force Japan to sign the Plaza Accord, which led to a sharp appreciation of the yen. However, the currency war caused a huge bubble in Japan's assets, which eventually burst in the early 90s. For nearly 30 years, Japan's economy was in a slump.
Japan's GDP peaked in 1995, followed by a noticeable **, and fell to its lowest point in 1998. Although it fluctuated in the following years, it never returned to the level of the early 90s. In 2012, it reached a new high, but then it decreased again until 2022, when only 423 trillion dollars. At the same time, the gap with the United States is widening, and the GDP of the United States is already as high as 2574 trillion dollars.
In recent times, as the Federal Reserve continues to raise interest rates, currencies have depreciated, with the yen falling the most significantly, even more than 15%. The current exchange rate has fallen to 151, which indicates that the dollar is about to harvest the yen. However, what is surprising is that Japan actually started selling US bonds for three consecutive months starting in June, and did not start selling them until September. This "magical" operation may be due to the continuous purchase of US dollars by the Japanese government and private sector, and the purchase volume may even be as high as 48.5 billion US dollars.
Although Japan has woken up to the current situation and has begun to sell US bonds, it seems that ordinary institutions and people in Japan are still willing to cooperate with the dollar harvest. However, the latest ** shows that the Bank of Japan will raise interest rates next year, which will be a positive support for the yen. At the same time, it is expected that the Fed will have to cut interest rates by 100 basis points, causing the dollar index to rapid**. Therefore, the yen is expected to launch the best counterattack in this currency war and achieve a counter-attack on the dollar.
As the loser in the currency war, Japan's economy has fallen into a slump after nearly 30 years of negative growth. However, Japan presents some unexpected maneuvers and performances in the current situation, which gives a glimmer of hope. Although the yen is facing pressure on the exchange rate at this stage, ordinary institutions and people in Japan still show continuous purchase of the dollar, and seem to be willing to cooperate with the dollar harvest. In addition, future interest rate hikes and cuts may also provide an opportunity for Japan to fight back against the dollar through the appreciation of the yen. However, the situation remains uncertain, and we need to continue to follow and listen to the latest developments in this currency war.
For 40 years, the winner of the currency war has always been the dollar, and Japan has paid the price as the loser. Japan's economy has been in a state of negative growth for nearly 30 years, and the gap between Japan and the United States is widening. However, in the current situation, Japan has shown some unexpected maneuvers and is expected to find an opportunity to fight back next year's rate hike and the Fed's rate cut. Although the situation remains uncertain, the future of the Japanese economy is still worth watching and looking forward to.