Is the Bank of Japan intervening in the yen exchange rate again?

Why didn't the United States' warning work?

Is Japan courting disaster or conspiring with the United States?

In the past few days, the foreign exchange market has been very strange, with a sense that a major war is about to come, either a global currency war or a more dangerous hot war.

In the past two years, the Japanese have frequently embraced and shaken hands with Americans, seemingly completely suppressed by the United States.

However, many times, the Japanese seem to be on the verge of rebellion.

The United States is struggling to protect itself, and if the suppression is too harsh, bowing and scraping is not the Japanese character.

Take the recent foreign exchange market as an example, a few days ago, the yen fell sharply again, once breaking through 161, setting a new low in 38 years.

Data on yen short positions show that international short sellers have once again gathered in Japan to massively short the yen.

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Previously, the United States repeatedly warned Japan not to arbitrarily intervene in the yen exchange rate, but Japan intervened despite the warnings.

As a result, the U.S. Treasury Department directly included Japan in the exchange rate manipulation monitoring list, issuing a serious warning.

This is clearly the United States directing international short sellers to frequently cause trouble, putting the yen directly on the dining table to enjoy a big meal.

However, starting on July 11, the yen suddenly rose continuously for several days and stabilized around 157 again.

This is puzzling.

Who is causing trouble between the United States and Japan?

Many people say that the Bank of Japan has intervened in the yen exchange rate again.

This is indeed true.

On July 12, the Daily News in Japan reported that the Japanese government and the Bank of Japan have confirmed that they have intervened in the foreign exchange by buying yen and selling dollars.

The yen exchange rate operator, Deputy Finance Minister of Japan, Masato Kanda, has almost become a god.

There have been rumors that he is going to be dismissed, but he is still fine now.

When did Japan become so tough?

The U.S. dollar index has fallen in response, and it is now close to 104, and it is unstoppable.

It seems that the efforts of the Americans to maintain the dollar's upward breakthrough to 106 in the previous period have been in vain.

However, at the same time, the renminbi is continuously falling, and the offshore renminbi has broken through 7.27, and the onshore renminbi has also broken through 7.25.

The yen has risen, the U.S. dollar index has fallen, but the renminbi continues to fall, which is very strange.

In theory, under such circumstances, the renminbi should appreciate, but what happened behind this?

There are two things worth paying attention to.

First, the Bank of Japan will intervene again in the yen exchange rate, which is a fact, so the rumor that Japan is cooperating with the United States is self-defeating.

Second, since the end of June, the euro has risen sharply, offsetting the impact of the previous fall in the yen.

When the yen started to rise again, the euro was still rising, and the dollar continued to fall, directly affecting the renminbi exchange rate.

Some people ask, what will be the trend in the future?

Let's talk about a few key points.

First, the dollar will not stop falling.

Because the U.S. CPI continues to decline, economic data continues to deteriorate, the expectation of dollar interest rate cuts has increased, and the prediction of interest rate cuts in September has exceeded 80%.

It is difficult to avoid the dollar falling in advance.

Unless the United States has any strange moves to strongly lift the dollar, in fact, they do have a lot of resources that can be used.

Second, the Bank of Japan will continue to fight, and the yen should be able to stabilize around 160.

Third, although the renminbi has been depreciating recently, the appreciation of the renminbi is the general trend, and it is expected to break through 7 within the year.

The recent fall of the renminbi is actually a bit strange.

Some people say that this is to support exports and actively devalue, and this possibility also exists.

However, the appreciation of the renminbi is the general trend.

On the one hand, it is the strong support of China's economy, and on the other hand, if the dollar cuts interest rates, other currencies will appreciate against the dollar.

Everyone has been shouting since the end of last year that foreign capital will massively buy Chinese assets, but this has not happened.

If the dollar cuts interest rates in September, this is almost certain to happen.

However, we still believe that the dollar will not cut interest rates in September, but it is more likely to raise interest rates again.

If Biden insists on not running for re-election, then at the end of October or the beginning of November, before the election vote, the dollar is very likely to cut interest rates once, and the Jewish financial group will support the Democratic Party and Biden's election to the end.

If Biden withdraws from the election, the Jewish financial group is likely to have little hope for the new person put forward by the Democratic Party, and the dollar is likely to not cut interest rates this year.

Now that things have come to this point, it is not necessarily a bad thing that the dollar does not cut interest rates, because it seems that we can survive, but the U.S. economy and finance may not be able to survive.

Even if they can grit their teeth and survive, the loss will definitely be greater than ours.