Recently, the U.S. dollar index has fallen 4% from its highs, and non-U.S. currencies have sharply**, the most dazzling of which is the yen. On Thursday night, the yen soared 3 against the dollar8%。Foreign exchange fluctuations are generally relatively small, 1% is a violent fluctuation, and this wave of appreciation of the yen can be said to have surprised the whole world.
However, while the dollar has collapsed**, US stocks are in full swing and are only one step away from their all-time highs. Although the yen has risen sharply, Japan** has fallen heavily in the last two days. At present, Japan is very dangerous, and it is only one step away from the high point of 33 years ago, and if this position cannot be rushed, it may take another 30 years.
Japan and the United States, which used to be very consistent, are now completely opposite, and the showdown has begun. Behind it is a contest between the two major central banks.
Naturally, the Fed has finished raising interest rates, and the market now expects that the Fed will definitely cut interest rates next year, and the probability of a rate cut by May is 100%. The Bank of Japan has made a rare statement that it will withdraw from the negative interest rate policy. In the past, the monetary policies of Europe, the United States, Japan, South Korea and other countries were almost the same, but now they are different.
As for us, of course, we are sitting on the hill and watching the tiger fight, we will definitely not raise interest rates, and as for rate cuts, we give you 5-10 basis points each time, and this process has been going on for 11 years.
To be honest, I don't quite understand the behavior of the Bank of Japan, after all, they don't have much reason to raise interest rates, and there is still uncertainty about whether they will get out of the deflationary quagmire, and they are going to raise interest rates, which is completely against the United States. And now Japan's GDP growth is negative in the third quarter, and there is no room for interest rate hikes.
I suspect that this is not a showdown, but that Japan is ready to give a big gift to the United States, and is ready to use its own sacrifice to make the United States achieve a soft landing.