Yen Volatility Warning》Under the Banner of Trump's Strong US Dollar, Japan May Be Forced to Raise Interest Rates Faster, Where is the Bottom Line for Exchange Rate?

With Trump's victory in the presidential election this week, the dollar strengthened sharply, with the yen depreciating to a three-month low on Thursday, and the yen's volatility with the dollar Arbitrage intensified. The market predicts that if the yen breaks the red line of 160, it may cause the Japanese government to invest several trillion yen in the currency market, or even raise interest rates in December ahead of schedule. (Executive Summary: With the US election storm approaching, a weak yen is the best safe-haven asset? (Background supplement: Japan admits inflation is difficult to solve, Central Bank president: can't sleep every day to think about the timing of interest rate hikes, yen depreciates to a three-month low) Japan's Central Bank announced in March this year that it ended the negative Intrerest Rate era since 2007 and chose to raise the BenchmarkIntrerest Rate to 0.25% at the end of July, and the market generally believes that a major reason for the rate hike is mainly Central The Bank is concerned about the excessive depreciation of the yen. Reuters reported that with Trump's victory in the US presidential election on Wednesday, leading to the strengthening of the US dollar and many currencies around the world, the yen briefly pushed the yen to a three-month low of 154.66 on Thursday, well below the high of 140.62 touched in mid-September. Wall Street expects that the economic policies advocated by Trump - domestic tax cuts and tariffs - may exacerbate inflation and push up the Intrerest Rate, which in turn will strengthen the dollar. That puts the yen at risk of further weakness again, which experts predict could allow Japanese authorities to intervene again in forex, as they did in July, and even increase pressure on Japan's Central Bank to raise interest rates as soon as December to prevent the yen from falling to a three-year low. Source: Trading View Japan July Flowers Over 5.5 Trillion Support Yen Bloomberg pointed out that the daily breakdown of forex for the third quarter released by Japan on Friday showed that the Japanese Ministry of Finance intervened twice on July 11 and 12, spending 3.17 trillion yen and 2.37 trillion yen respectively, for a total of about 5.54 trillion yen (1.16 trillion New Taiwan dollars) to support the yen. Before the administration's action in July, the exchange rate had fallen below $160, a 38-year low, in part because speculators took advantage of the huge interest rate differential between Japan and the United States to trade heavily in the yen Arbitrage. If the Japanese government intervenes, or even raises interest rates, as it did in July, it may cause a large number of yen Arbitrage transactions to be Close Position, and global stock markets may be affected. Read more: When did the biggest bubble in U.S. stock history burst? Analyst: Not afraid of recession, the real fatal is the difference between Japan and the United States Intrerest Rate Japanese authorities sternly warn: ready to act on excessive currency fluctuations Meanwhile, Atsushi Mimura, Japan's top forex official, issued Thursday's strongest warning against the sharp depreciation of the yen since the end of July, saying the government would closely monitor developments in the forex market, including those driven by speculators, with extreme urgency. And is ready to act on the "excessive" currency Fluctuation. Many economists say the USD/JPY Exchange Rate 160 is the bottom line for Japanese authorities, and crossing this red line could prompt the government to intervene further in the currency, or even raise interest rates earlier in December. Previous Reuters polls showed that most economists expected Japan's Central Bank to raise its Intrerest rate to 0.5% by the end of March next year and not raise interest rates this year. Tsuyoshi Ueno, senior economist at the NLI Research Institute, said, "Politicians don't want the yen to weaken, so even those who urge Japan's Central Bank to be cautious about raising rates may agree to a rate hike if the yen accelerates down." In this sense, a weak yen could prompt Japan's Central Bank to raise interest rates steadily." Japan's intervention in Forex may face Trump's obstruction However, if the Japanese authorities want to intervene in the future, they may face a major variable, that is, Trump, whose policies are known for fickle and uncertain. Economists are divided on whether Trump supports Japan's support for the yen. Some economists said that starting in January, under the Trump administration, Japan may find it easier to convince the United States that currency intervention is necessary, since Trump has expressed support for a weaker dollar in the past. Atsushi Takeuchi, principal researcher at the Ricoh Institute for Sustainable Development and Business, said: "If Japan prevents the yen from weakening, Trump's position may be to intervene well. Because from his point of view, the United States does not need to spend anything, the Japanese are doing it for him." Others believe Japan could actually be in trouble. Tohru Sasaki, chief strategist at Fukuoka Financial Group, said the U.S. could put conditions on Japan before agreeing to Japan's sale of dollars, as it could exacerbate inflation in the United States. Trump might say, if you want to intervene, buy some fighter jets. The Japanese government is likely to remain weak for some time and may not be able to cope with the situation, so intervention may face higher barriers. Related reports Japan's Diet Election" The Liberal Democratic Party lost miserably, the yen hit a 3-month low, Shigeru Ishiba is afraid to become the shortest-lived prime minister? It is expected that Central Bank will postpone interest rate hikes, Japan's interest rate hike effect" zombie enterprise crash: the number of bankruptcies this year has exceeded 5,000, and the debt has reached 1.38 trillion yen Japan's interest rate hike is coming! More than eighty percent of scholars estimate that the Intrerest Rate will be raised to 0.5% by the end of March next year Sigh of relief! Japan's Central Bank keeps Intrerest Rate unchanged, when will the dollar Arbitrage bomb detonate next? Under the banner of Trump's big dollar, Japan may be forced to accelerate interest rate hikes, where is the bottom line of Exchange Rate? This article was first published in BlockTempo "Dynamic Trend - The Most Influential Block Chain News Media".