2024-01-08 03:05 Economic Daily Editorial Japanese political scandal affects economic trends.Reuters
2024 is an uneasy start for Japan, with a large-scale earthquake on the Noto Peninsula on New Year’s Day and a plane crash at Haneda Airport the next day; we pray that Japan will survive these natural disasters and accidents safely. However, looking forward to 2024, the Japanese government may have a bumpy road, because the ruling Liberal Democratic Party is facing a major scandal, and core cabinet members of the regime have been forced to step down to accept judicial investigations. It is unknown where the storm will burn; paradoxically, the devastating scandal of the ruling party has not yet It is possible to help Japan’s economy turn around in 2024.
The Emperor of Japan’s New Year’s messages over the years have always shown concern for the people who suffered due to natural disasters in the past year. This year’s New Year’s message from the Emperor of Japan, in addition to natural disasters, also mentioned the people’s suffering due to high inflation in the past year, which is the first time in years. Last month, the Ministry of Health and Welfare released a real salary survey. As of October last year, real wages were 2.3% lower than the same period last year, marking the 19th consecutive month of negative growth.
An important reason for Japan’s high inflation is the severe depreciation of the yen, which fell from 130 yen to 1 U.S. dollar in January to a low of 150 yen in November. The main reason for the continued depreciation of the yen is that the U.S. Federal Reserve has violently raised interest rates from zero to more than 5% within two years in order to combat inflation. Central banks in major economies around the world have also raised interest rates in response. , but the Bank of Japan, the Bank of Japan, adheres to the monetary easing policy and maintains the policy interest rate at negative 0.1%.
The Bank of Japan’s insistence on the negative interest rate policy has made the yen the weakest currency among the world’s major economies. It has also made the economies of island countries that rely on imported resources suffer from persistent inflation caused by devaluation. Even the emperor’s New Year’s message said everyone has worked hard.
The most important job of central banks in various countries is to maintain price stability and full employment. In terms of price stability responsibilities, the Bank of Japan can be said to have failed as a central bank in the past year. But the Bank of Japan is also in trouble. Bank of Japan Governor Kazuo Ueda took office in April last year. Before taking office, at the Senate review meeting, Senate Secretary-General Hiroshi Seko of the Abe faction of the Liberal Democratic Party directly asked: “Abenomics has not yet been implemented.” If you succeed, will you inherit it?” The Abe faction is the largest faction in the Liberal Democratic Party. Without the support of the Abe faction, the current Prime Minister Kishida may be forced to step down at any time. Even the Prime Minister wants to live by the Abe faction, and the Bank of Japan president naturally does not dare to disobey.
Abenomics was born in 2012. The time and space environment in Japan at that time was that after the 2008 financial tsunami, global funds fled the US market. As a safe-haven currency, the yen rose above 80 yen per US dollar, and export-oriented Japanese companies were in difficulty. Therefore, in addition to promoting economic growth through loose monetary policy, Abenomics also hopes to use zero interest rates to lower the yen exchange rate and then evolve to negative interest rates in 2016.
Abenomics did indeed bring vitality to the Japanese economy and Japanese stocks after 2012, but when the Federal Reserve violently raises interest rates to fight inflation in 2022, Abenomics will instead lead to serious consequences of inflation. However, Abe was assassinated in 2022. In order to compete for the leadership of the faction, the elders of the Abe faction have regarded themselves as defenders of Abenomics. So Bank of Japan President Ueda can only follow the logic of Abenomics and say that he will wait until the public is sure Rising wages bring economic momentum, which is the time to correct negative interest rates.
The market predicts that the timing of the revision of negative interest rates will probably be the Bank of Japan policy meeting in March this year, and the possibility is getting higher and higher; because Abe is reeling from the scandal and his policy influence is frozen.
It is reported that members of the Abe faction are involved in a case of receiving “kickbacks” from fund-raising dinners. After Abe was assassinated, the faction was dominated by five elders including Chief Cabinet Secretary Matsuno Hiroshi, and these five elders were all involved in the secret funds scandal in 2016. Formerly resigned from key positions in the cabinet or party. Even if these five elders escape from prison in the future, their dishonorable records will remain with them forever, and their political future will be limited.
The subsequent judicial investigations and prosecutions of Abe’s elders should be a continuous news story in Japanese politics in 2024. In such a turbulent political environment, with less pressure from the political circles, the Bank of Japan will be able to more easily break away from the constraints of Abenomics and allow Japan to enter a cycle of interest rate hikes.
For Taiwan’s industrial and financial circles, what needs to be asked in 2024 is whether the Bank of Japan will return to the zero interest rate before 2016 once it gets rid of negative interest rates this spring, or will it continue to raise interest rates to a certain extent. Different trends will determine whether the yen continues to weaken or strengthen, and requires continued attention.
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2024-01-07 19:05:15
