Federal Reserve and the BOJ, noted a report released by Japan's Sumitomo Mitsui DS Asset Management. In 2023, the trajectory of the yen will be determined by the monetary policies of the U.S. ![]() 20, 2022, the BOJ announced a shift in its ultra-loose monetary policy, raising the yield on the 10-year Japanese government bond as high as 0.5 percent from a previous cap of 0.25 percent.įollowing the decision, the yield on newly issued 10-year government bonds, seen as an indicator of long-term interest rates, briefly spiked in the Japanese bond market. While the impact of the sharp depreciation on the Japanese economy continues, the yen's trend in the new year is closely watched around the world.Īfter a monetary policy meeting on Dec. (Xinhua/Zhang Xiaoyu)Ī report by corporate database Teikoku Databank showed that 21 bankruptcies reported during the first 10 months in 2022 were caused by yen's depreciation, with 19 reported from August to October.įor the whole year of 2022, the number of Japanese business failures due to yen's depreciation is likely to surpass 22 reported in 2019, reaching the highest level in five years, according to Teikoku Databank. "However, it is difficult for enterprises to pass on higher costs downstream through price increases, with many of which squeezing the operating space of most firms and small businesses facing the risk of bankruptcy," he said.Īn electronic display shows a real-time exchange rate of the Japanese yen against the U.S. Hidetoshi Tashiro, chief economist at Japan's Sigma Capital Ltd., said with the country being a big importer, the rapid weakening of the yen sharply pushes up the operating costs of enterprises. However, the Bank of Japan (BOJ), or Japan's central bank, was forced to stick to the ultra-loose monetary policy due to weak domestic demand and sluggish economic recovery, according to the report.Īmid surging energy costs, Japan's wholesale prices rose for the 21st straight month to hit the highest level in November, with the corporate goods price index rising 9.3 percent from a year earlier to 118.5, central bank data showed.Īnalysts believed that the weaker yen amplified the negative impact of high international energy prices on the Japanese economy. The United States adopted a tight monetary policy in response to high domestic inflation, triggering many central banks to follow up with interest rate hikes, according to a report released by Japan's largest bank MUFG Bank. ![]() In late October 2022, the yen-dollar exchange rate in Tokyo's foreign exchange market plunged below 150, the lowest level since August 1990. Federal Reserve since the beginning of last year, which also pushed the dollar up against other currencies. Yen's depreciation in 2022 was caused by multiple aggressive rate hikes of the U.S. In 2022, big losses in the yen's exchange rate shocked the Japanese economy, with the currency once falling by more than 30 percent against the U.S. ![]() dollar might gradually pick up pace this year. 15 (Xinhua) - As the new year starts, the Japanese yen is closely watched by global financial markets with local institutions predicting that the currency's strength against the U.S. ![]() The yen will gradually strengthen against the dollar this year and reach a 129 yen-dollar level by the end of the year, according to forecasts by Japan's Sumitomo Mitsui DS Asset Management. Photo taken on Apshows the Japanese yen in Tokyo, Japan.
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