For a period of time, influenced by factors such as the interest rate difference between Japan and the United States, the yen continued to depreciate, which had a negative impact on Japan's economic situation and people's lives. The Japanese economic community has constantly called on the government and the central bank to take strong measures to intervene. However, from the current situation, due to the structural contradictions of the Japanese economy itself, it is difficult to find a panacea, and the future trend deserves further attention.
At the end of April, the Bank of Japan held a monetary policy meeting. At the press conference after the meeting, the governor of the People's Bank of China, Kazuo Ueda, said that most members believed that the depreciation of the yen had not had a great impact on the consumer price index (CPI). In response to the question of "whether the relevant impact is within the scope that can be ignored", he made a positive answer. In addition, he also made it clear that the devaluation of the yen pushed up prices and helped to achieve the inflation target of 2%. According to the analysis of Japanese economists, the relevant statements made by Inota and Mr. Inoda were seen by the market as a reflection of the Bank of Japan's permission to devalue the yen, which also showed that the Japanese government and the Bank of Japan had stepped back in their cooperation to prevent the devaluation of the yen. This also became an important reason why the yen depreciated to 160 yen per dollar on the foreign exchange market on April 29. In addition, the judgment that the depreciation of the yen will not significantly increase prices in the short term is seriously inconsistent with the real life experience of the people, which is regarded as "belittling the pressure caused by the depreciation of the yen on national life", and has been widely criticized.
On May 9, the Bank of Japan announced the main opinions of the members at the meeting. It can be seen that the committee members are worried about the rise in prices caused by the devaluation of the yen. It is not that Eda and Mr. Ueda behaved so "lightly" in the interview. During the discussion on the price situation, many members believed that due to the historical depreciation of the yen, we must pay attention to the trend risk of price rise, and the future price rise rate may be higher than the prediction of the Bank of Japan. With regard to the future monetary policy, some members believed that it was necessary to accelerate the pace of policy normalization under the circumstances of the depreciation of the yen and the continuous growth of CPI. Some analysts believe that this is a hint that the time node of the Bank of Japan's next interest rate hike may be ahead of schedule. In terms of national debt, some members believed that the Bank of Japan should be guided by the restoration of market functions, observe market trends and supply and demand, seize the opportunity to promote holdings reduction, and clarify the direction at the appropriate time and occasions.
Some analysts believe that the deviation between the interview and the actual results published later is the result of the pressure exerted by the Bank of Japan's Kishida government. On May 7, before the announcement of the committee's opinion, Japanese Prime Minister Takeo Kishida met with Yoshio Ueda. After the meeting, he changed the direction of his speech after the monetary policy meeting and became "alert" to the depreciation of the yen. He said that he would pay close attention to the recent weakness of the yen and its potential impact on the economy and prices. On May 8 and May 9, Sota attended the Financial Committee of the Congress for two consecutive days, and again clarified that the exchange rate is one of the important factors affecting the economy and prices. If the exchange rate changes have an impact on CPI, or this risk increases, financial policies need to be taken to deal with it. Some people believe that this is also a hope to curb the depreciation of the yen in the foreign exchange market by making a statement.
Seen from the general background, the Liberal Democratic Party where Kishida Wenxiong belongs has been plagued by recent scandals. From the unified education incident to the "free travel" of the Women's Bureau, the "dancers event" of the Youth Bureau's party, especially the political "black gold" scandal still fermenting, all had a negative impact on their support rate. In order to save the support rate, Takeo Kishida gave play to his diplomatic expertise and visited the United States in April, hoping to demonstrate his diplomatic ability and achievements in improving Japan's international influence by building a new era Japan US alliance system. However, in the House of Representatives by election that just ended, the LDP was forced to give up recommending candidates in the two constituencies of Tokyo Metropolitan and Nagasaki Prefecture due to the pressure of the political "black gold" incident, and lost to the Constitutional Democratic Party in the election of Shimane County, the only one that recommended candidates. Some people believe that the election results cast a shadow on the future political future of the Kishida government.
It can be said that how to plan the domestic economic situation and improve the actual life of the people seems to be the "life-saving straw" to maintain the stability of the Akita government. However, from the actual situation, the depreciation trend of the yen continues, the prices of energy, daily necessities and food are rising, and people's lives are under serious pressure. Although Kishida hopes that the previous "package of economic policies" will be implemented in this summer to achieve the effect of quota tax cuts, bonus payments, wage increases and other positive factors, it remains to be seen whether he can get what he wants.
On May 9, the Ministry of Health, Labor and Welfare of Japan released the monthly labor statistics for March. Data shows that Japan's total cash wage in March increased by 0.6% compared with the same period last year, but its core CPI excluding fresh food reached or exceeded the price stability target of 2% for 24 consecutive months, up 2.6% year on year to 106.8. The per capita real wage finally fell 2.5% year on year, a 24 month decline, the longest record since 1991.
Although the wage increase in Japan reached the highest level in 33 years in the spring labor negotiations, it still takes time to reflect the change in real wages. According to the analysis of Japanese economic circles, due to the termination of Japanese government subsidies for electricity and gas in May, and the rise of imported energy and food prices caused by the depreciation of the yen, a surge in prices has been formed. The CPI from May to July is expected to rise by about 0.25% month by month, and the results of labor negotiations may be offset. It is predicted that the real wage growth "from negative to positive" may not be realized until the end of this year. Takeo Kishida's previous commitment to the Japanese people may not be fulfilled. At the press conference on May 9, Kobayashi, chairman of the Japan Chamber of Commerce and Industry, also said that with the depreciation of the yen, the import prices of raw materials, electricity, gas and other products would be affected. He hoped that wage increases would not become "stones on the beach".
On May 10, the Japanese government held an economic and fiscal policy meeting headed by Prime Minister Takeo Kishida. The meeting made it clear that it would pay close attention to the recent trend of the yen exchange rate and continue to promote close cooperation between the government and the Bank of Japan. The meeting discussed macroeconomic issues such as monetary policy and prices. Members of the private sector expressed concern about the excessive rise in prices and called on the Bank of Japan to carry out appropriate policy management. Some participants believed that the Japanese economy was at a "critical point" and that negative economic growth was expected from January to March. There are also voices calling for Japan to simultaneously solve the problems of increasing wage income, realizing price transfer and solving labor shortage.
Some people believe that the Bank of Japan may have taken exchange rate intervention measures to buy yen and sell dollars in April. According to the foreign exchange reserve data released by the Ministry of Finance on May 9, Japan's foreign exchange reserve at the end of April was about $1.28 trillion, a decrease of $11.6 billion compared with the end of last month, but the Bank of Japan did not make a clear response to this. In addition, according to the national debt data, the Ministry of Finance announced on May 10 that by the end of 2023, the national debt, loans and short-term government securities had totaled 1297.16 trillion yen, an increase of 26.66 trillion yen over the end of 2022, breaking the record for eight consecutive years. Some people worry that if Japan's interest rate continues to rise due to policy adjustment, the interest payment burden of newly issued national debt will increase, which may cause financial pressure, which also raises practical problems for Japan to intervene in the exchange rate.
The Kishida government of Japan has regarded the depreciation of the yen as an important factor hindering it from demonstrating its domestic economic achievements, and is promoting the Bank of Japan to actively seek ways to solve the depreciation of the yen and extricate itself from the current predicament. However, due to Japan's high dependence on imports of resources and energy, as well as the structural contradiction between the exchange rate and the fiscal "dilemma" in the domestic economy, at the same time, the exchange rate in the international foreign exchange market is excessively affected by the United States, lacking autonomy and stability. In this context, it remains to be seen whether Japan can find a "panacea" that can improve people's real life feelings without causing pressure on its own finances. (Source: Economic Daily Author: Chen Yitong)
