The yen's exchange rate against the U.S. dollar has surpassed 155 yen per dollar

The Bank of Japan (BOJ) will hold a monetary policy-making meeting today and tomorrow. The yen's exchange rate against the U.S. dollar has surpassed 155 yen per dollar despite cooperation between Korea, the U.S. and Japan last week due to the strong dollar and Japan's zero interest rates, which continue to rise.


If the yen continues to weaken, Japan will face inflationary pressure, and Korea and China, which are competing with Japan in export, will not be able to take it lightly.

After last week's Korea-U.S.-Japan finance ministers' meeting, the price of the won preemptively fell from 1,400 won to 1,360 won, but as the yen continued to weaken, the won fell back to 1,380 won, and the won-yen exchange rate fell from 900 won to 880 won. The won rose to 1,380 won the day before yesterday and closed at 1,369 won and the yen at 887 won due to foreign stock market purchases. Moreover, even the Chinese yuan, which was considered a fixture, has remained unchanged at 7.25 in the Chinese domestic market, while the CNY traded in foreign markets has surpassed 7.27.

I remember reading Sun Won-bin's book "The Exchange Rate War" in the past. Japan, which is booming in the U.S., has to speed up exports to speed up its recovery. Korea also has to make a recovery this year in order to revive its economy from the semiconductor slump last year. China has to cut interest rates due to overproduction and real estate problems, but the prolonged U.S. interest rate has turned into a situation where it can't afford to. Everyone thinks that Japan will not raise interest rates tomorrow. If this happens, the yen will continue to weaken, and Korea and China, which are competing with Japan, will have no choice but to increase their exchange rates.

If the three Far East countries go into a currency war, it will be self-destructive. There will have to be a policy decision between Japan and the United States. And I think that Japan's interest rate hike, which will reverse the weakening of the Japanese yen, will continue, and until then, the Japanese government will need to intervene appropriately in the foreign exchange market.

Some say that the absolute price of the exchange rate should now be viewed as a different measure. The current exchange rate accurately reflects the size and growth of the U.S. economy and the economic downturn in East Asia. Still, the rise in the exchange rate is a matter of utmost concern, as it could fuel the rise in import prices in the Korean economy already suffering from the inflation of agricultural and fishery products, leading to the inflation of industrial products. I would like to bet to some extent on the possibility that Japan will raise interest rates tomorrow. Anyway, only ordinary people are in a difficult situation. A society that recommends drinking...