(Source: CCTV-2 Financial Channel "CCTV Financial Review" 2024-06-27)

On June 26, the exchange rate of the yen against the US dollar fell below 160.50 yen per US dollar, reaching the lowest value in the past 37 years. In March this year, the Bank of Japan exited the negative interest rate policy that had been implemented for many years. However, the Japanese yen did not benefit from this. Instead, it continued to depreciate, falling below the market's psychological threshold continuously. Recently, it has accelerated its downward trend. So what happened to cause the yen to accelerate its decline? The Japanese government has repeatedly stated that it is ready to intervene in the foreign exchange market 24 hours a day if necessary. How will they intervene in the market? With continuous depreciation, is the Japanese yen still a so-called safe-haven currency? What kind of fluctuations in the exchange rate of the Japanese yen may occur in the future? Focusing on these topics, the "CCTV Financial Review" column of the CCTV-2 financial channel invited Jiang Ping, a professor of finance at the w88 casino of International Economics and w88 of w88 casino, to give an interpretation.

Professor Jiang Ping pointed out that the root cause of the accelerated depreciation of the yen still lies in the United States. The yen has continued to depreciate since the beginning of 2024. The yen exchange rate fluctuated significantly at the end of April and early May. The Bank of Japan used more than 60 billion U.S. dollars to support the yen exchange rate. The recent depreciation of the yen has accelerated again. In addition to the low probability of U.S. interest rate cuts, it may also be due to the following events: First, Japan's fifth largest bank Norinsu Central Bank suddenly announced the sale of approximately 63.2 billion U.S. dollars of U.S. Treasury bonds and European bonds to make up for huge unrealized losses. Second, on June 20, the semi-annual currency report released by the U.S. Department of the Treasury showed that Japan was added to the foreign exchange "monitoring list." Therefore, the market believes that the Bank of Japan will not continue to significantly intervene in the Japanese yen exchange rate in the future, and will therefore be more aggressive in shorting the Japanese yen exchange rate and promote accelerated depreciation of the Japanese yen.

Currently, the Bank of Japan holds limited liquid U.S. dollar assets, and selling short-term U.S. Treasury bonds cannot increase much liquidity. The sale of long-term Treasury bonds depends on the attitude of the United States, which makes it difficult for the Bank of Japan to purchase Japanese yen. Direct intervention in the exchange rate. Secondly, if the Bank of Japan raises interest rates, it will face a sharp increase in debt interest. In the case of the Japanese government's high debt, the Japanese economy will be even worse. Therefore, Professor Jiang Ping believes that the Bank of Japan faces a dilemma when it takes action.

Professor Jiang Ping said that the Japanese yen was once used as a "safe haven currency" because of its low interest rates and good liquidity. Now, this situation has changed. The Japanese yen no longer maintains zero interest rates for a long time, and the exchange rate is unstable. Therefore, the Japanese yen is no longer a "safe haven currency" and may even become a "disaster currency." It will be more difficult to stop the subsequent decline.

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