The Japanese yen fell to its lowest level in 34 years. In the past three years alone, the Japanese currency has lost nearly 50 percent of its value.
“These are quantities that have no analogue at the global level,” said Moritz Kremer, Chief Economist at the “Landesbank Baden-Württemberg” to ARD: “This is an unprecedented depreciation of the yen, which even surpasses Brexit,” said the expert.
The interest rate policies of other countries have a negative impact on Japan
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The reasons are rooted in the interest rate policy of central banks. Especially the one in the United States, where interest rates are high, and the expected drop has not materialized so far. By contrast, the Bank of Japan has unexpectedly raised interest rates just once in 17 years.
“An interest rate hike by the Bank of Japan should have narrowed the interest rate differential and increased interest in the yen, but the opposite has happened,” Kremer said. Instead, investor capital continues continues to flow into the U.S. And Japan’s economy is facing a number of problems – low growth, labor shortages, inflation and limited spending.
Promotion of tourism
Nevertheless, the Japanese stock market recorded record after record. The rise in artificial intelligence, but also the favorable yen, makes this possible. At the same time, the depreciation of the yen had a positive effect on tourism, which was also setting records. For many tourists, the country is becoming more accessible.
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In 2023, 25 million tourists visited Japan, which is a big jump compared to 2022, when 3 million visited the Land of the Rising Sun, notes “El Pais”. This year, foreign visitors are expected to reach 33 million, which will set a new record after the 32 million who visited Japan in 2019. The government wants to turn the country into a major tourist destination, welcome up to 60 million people by 2060.
At the same time, mass tourism has caused discontent among local people, who reject the behavior of some tourists, and businesses, who complain about the lack of labor to serve the guests of the country All this led to the introduction of fees to visit parts of Okinawa and restricted access to Kyoto’s infamous geisha district.
At the same time, it is not clear how long the decline of the yen will last. Until the US Federal Reserve lowers interest rates – possibly in September, this will not happen, according to Antie Erhard from ARD.
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Source: Mother well
2024-08-09 19:54:33
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