Recently, the Bank of Japan has made a strong statement about continuing to raise interest rates.

What is the purpose of this persistent interest rate hike?

Why do many people think this is a stab in the back to the United States?

This year, the performance of the Japanese has been impressive, are they about to make a complete turn and counterattack the United States?

There are many stories behind this.

Let's talk about what happened in the last two days.

On August 23, Bank of Japan Governor Haruhiko Kuroda and Finance Minister Shunichi Suzuki attended a special hearing on the yen interest rate hike at the Japanese Diet.

They spoke in unison, strongly advocating for hawkish policies, stating that if Japan's inflation and economic data continue to meet the central bank's expectations, the Bank of Japan will continue to raise interest rates and reduce government bond purchases.

In March, the Bank of Japan raised interest rates for the first time, and some people said that Japan and the United States were playing a double act to continue to drain liquidity from Asia.

At that time, some people believed it, but now no one believes it.

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The US dollar has given up on lowering interest rates, so what liquidity is the yen draining?

Is it draining American liquidity?

In recent months, Japan has not shied away from confronting the United States, for example, despite repeated warnings from the United States, it sold hundreds of billions of dollars in US debt in a month to intervene in the yen exchange rate.

This is just the beginning, and there are more serious incidents to come.

At the end of July, Japan raised interest rates again, causing the yen to appreciate, and large-scale yen carry trades to be closed, which directly led to the collapse of stock markets in the United States and Japan.

Wall Street in the United States was furious, with giants like Goldman Sachs and Morgan Stanley stepping forward to accuse Japan of doing bad things, and Morgan Stanley even warned repeatedly that the yen carry trade has only just begun and is far from over.

The consequences of Japan's confrontation with the United States are, of course, very serious, and Fumio Kishida was forced to step down.

Even so, the Japanese did not stop.

Some people say that Fumio Kishida was forced to step down by both the Americans and the Japanese right-wing, both of whom were dissatisfied with him.

It's easy to understand why the Americans are dissatisfied with him, but the Japanese right-wing think he is too soft on the United States, even somewhat servile.

So, the reason for Japan's persistence has been found, the Japanese right-wing has gone crazy, they want to take advantage of his illness to kill him, they want to take the opportunity to counterattack the United States.

Some people say that Japan has been tightly controlled by the United States, how dare they resist?

You haven't seen the madness of the Japanese right-wing during World War II, later the Americans used a coup as an excuse to kill a group of young Japanese right-wing officers.

However, can a country with a tradition of right-wing and militarist thinking be easily wiped out?

Japan is such a big country, and in the past few years, the right-wing has been rampant, Shinzo Abe is the leader of the right-wing, so he died.

But the right-wing in Japan is all about going forward one after another, dying without regret, so they are making trouble again this year, which is easy to understand.

The recent performance of the Bank of Japan is obviously very right-wing.

After the stock market disaster caused by the interest rate hike at the end of July, the United States warned again and again, but Japan did not seem to have any intention of stopping, and it is hard to say that this is not the fuse for Fumio Kishida to step down.

After a short period of weakness, the Japanese Ministry of Finance and the central bank raised their heads again, repeatedly hinting that they would raise interest rates again and reduce the purchase of government bonds.

Everyone knows that the issuance of yen is very similar to the US dollar, both are directly printing money to buy government bonds.

Japan has been quantitatively easing for decades, printing a lot of money, and the proportion of government bonds is even higher than that of the United States.

If the yen interest rate hike is only an indirect tightening policy, reducing the purchase of government bonds is the most direct tightening policy, which is directly printing less yen.

So the question is, after decades of loose policy, why does Japan suddenly want to turn to tightening?

This question is a bit complicated, to put it simply, decades of loose policy have not been able to save the Japanese economy, but have made the government bonds more unsustainable than US government bonds.

The reasons for this are also complicated, the most direct problem is that a large amount of yen released by easing have gone abroad, Japan is making contributions to the global economy, especially Southeast Asia, where yen investment is the most, and of course, there is also China.

The outflow of capital from Japan is getting more and more serious, even Mrs. Watanabe has gone abroad to buy US dollars and US bonds, and the domestic economy is getting weaker and weaker, many companies are lying flat on the zero interest rate policy, and consumption is also not rising.

How can companies lie flat?

They don't need to make money, if they don't have money, they can borrow from the bank, anyway, there is no interest, such companies' employees don't want to raise wages either.

Japanese listed companies are full of such zombie companies.

What is getting fatter and fatter is the big capitalists who have gone abroad on a large scale, in essence, they are making money for American capitalists.

Is there any hope for the Japanese economy?

If you want to save the Japanese economy, you have to use strong medicine, scrape the bone to cure the poison, and the yen interest rate hike is a must-go route, only in this way can the capital abroad flow back.

Raising interest rates can attract capital to flow back!

The Japanese have learned a trick from the process of the US dollar interest rate hike in the past two years.

Only when a large amount of overseas yen capital flows back to invest domestically can the Japanese economy have hope, which is actually the same problem as the hollowing out of the United States.

However, the yen interest rate hike will make the United States very uncomfortable, which should be explained from several aspects.

First, for many years, the Bank of Japan has essentially been a blood-sucking platform for the United States in Asia, helping Americans make money by issuing a large amount of yen.

If interest rates are raised, the money-making function will be greatly reduced.

Second, the Bank of Japan and the private sector, including Mrs. Watanabe, have bought a large amount of US bonds, if the yen interest rate is raised, these funds will be gradually withdrawn back to Japan, this is the water pump on the neck of US bonds.

Third, the US dollar wants to lower interest rates, and the yen wants to raise interest rates, what does it mean to go against each other?

Isn't it to rob American money?

So, the big play of Japan counterattacking the United States is really coming.

Is it choosing China?

Only by following China can there be a future.