Hello!
It feels like autumn, doesn't it? !
Barcelona is getting cooler and cooler. . . Ah, summer is over. . . Surely that Tube must be sad too? !
Even so, won't the yen stop depreciating?
Today, the dollar went to just below 146 yen at one point. After that, foreign exchange intervention entered, and it was pushed back to the 142 yen level, but it's scary.
When I was in elementary school, I had a cut blood vessel in my nose and had a nosebleed that didn't stop for over an hour, so I went to the hospital. I was scared even then.
I wonder if it will stop someday with nosebleeds. . .
We also import from Spain to Japan, so the weak yen is a headwind. Even if the yen is weak, the price cannot be raised unnecessarily, and sales are also in the yen, so if the yen weakens further while we are bringing it here, it will be considerably reduced when we return to the euro.
That's why the yen's depreciation is a real problem.
As long as you don't have overseas assets, I think you'll have a headache. Overseas travel will increase. Imported products become more expensive. The price of the iPhone seems to have risen three months ago.
On the other hand, from the point of view of foreigners, Japanese things are extremely cheap now. Yoshinoya's beef bowl is 3 dollars, so it's not a developed country where you can eat that kind of food for 3 dollars. Ramen is $5. Even sushi can be had for under $10 for lunch.
In fact, according to a friend of mine who is knowledgeable about real estate, with the yen depreciating this much, Americans and Chinese people with money seem to be ordering luxury apartments in Japan over the phone. .
It's frustrating to be bought up by foreigners, but it can't be helped because their money will stop the yen's depreciation.
But why is the yen depreciating so much?
Today I would like to briefly explain it as a former Wall Street worker!
It's not Sesame Street! It's wall!
Me in Naniwa Wall/ Kinzai Street
Recently, there is no trace of that, and everyone just calls me a dirty old man. . . I was drinking at a tapas store the other day, and I asked if it was a backpacker. Too much to be asked. . .
It could be a compliment, of course. . . Didn't you have a backpack, or even a waist pouch from the luxury brand Off White? ! Did it seem so wandering?
I will take a fresh look and explain the depreciation of the yen.
Recently, it went to 1 dollar = 146 yen. This is the lowest level in 24 years. In just one year, the yen has depreciated by about 33%. Of course, the yen is depreciating against the euro, but the dollar is still the best.
In one year, American products have risen by 33% when purchased in Japanese yen. If this happens, I won't be able to buy American Reese's peanut butter chocolate, which my wife always buys for adults. Yes, next to the cod roe, I'm a wife who also has an eye for chocolate.
Why?
This is due to US rate hikes. An interest rate hike is an increase in the policy interest rate.
So what is the policy interest rate?
In the first place, banks are in the business of increasing money by lending or investing the money collected from everyone's deposits. Not all the money collected is used for loans and investments, but there is a rule that part of the money you have must be placed in the Federal Reserve Bank (the Bank of Japan in Japan). I have.
And when this money runs short, it has to borrow from other banks to meet the stated amount of its reserves. Interest is paid on funds borrowed from other banks, and this interest rate is called the federal rate (policy rate). Generally speaking, when we talk about rate hikes, we mean raising the federal rate.
Until quite recently, the federal rate was zero, but interest rate hikes have continued, and with the 0.75% hike yesterday, it is now 3.25%. Even if you don't take any risks, just leaving it there will increase your money by 3.25%.
On the other hand, in Japan, this interest rate is always zero, or negative. With Switzerland also raising interest rates today, Japan is the only country in the world with negative interest rates. And the Bank of Japan's boss, Kuroda, has made it clear that interest rates will not be raised even if there is some inflation.
When you think of him as president, he seems to be very important, but I think you should think that he is actually as great as Okawa at Okawa Kogyo.
By the way, even in Europe, interest rates are being raised, and the current policy interest rate is 1.25%.
So why would raising interest rates make a currency stronger?
By raising the interest rate, theoretically, it will spread to market interest rates (interest rates on loans to companies and individuals and interest rates on deposits).
For the borrower, if the borrowing interest rate rises, the procurement cost will rise, and unless the borrower lends money at a correspondingly higher interest rate, it will not be profitable. On the other hand, from the lender's point of view, if the interest rate on loans rises, they will want to collect money and lend it even if they pay a slightly higher interest rate. Therefore, interest rates will rise.
Even if you make a deposit or invest in a country with low interest rates, there is almost no income from interest, but in the United States, where interest rates are high, you can earn a little more just by keeping your money in the bank, let alone buying 1-year US Treasury bonds. That's all, now it's 4.0% interest.
By the way, buying US Treasury bonds means receiving a loan certificate in exchange for lending money to the United States. Even if you deposit your money in a Japanese bank with a lower credit rating, you won't get any interest, but in America, you can just lend your money to the country and you'll get a high interest.
That's why people in countries with low interest rates, such as Japan's currency, sell the yen, buy the dollar, and use the dollar to make investments and deposits.
By the way, while I was temporarily returning to Japan this summer, I was stunned when I asked a certain blue bank about the dollar fixed deposit rate. It was a whopping 0.01%. Mizuho immediately withdrew most of the dollar. However, it would be bad if I could withdraw all of it, and I lost the enthusiasm of the sales person in charge, so I bought the remaining amount of a half-year structured deposit that would be 0.01% if the exchange rate reached 146 yen to the dollar, and 3.5% if it did not go that far. Oops. I usually never buy this kind of product, but the devil stabbed me. Since I was a salesman, I am a person who breaks down if I do my best in sales. However, the moment you purchase these products, the blue bank takes about 10% of the amount you paid invisibly.
Back to the topic,
So why raise interest rates?
Rate hikes are usually implemented in two ways. The first is when the economy is going too far and needs to be contained, and the second is when excessive inflation needs to be contained.
Why is the economy slowing down?
The lower the interest rate, the more people and companies in the world borrow money to buy things and invest. The principle of economic growth is to make a lot of things, sell a lot, make money, and increase income.
Conversely, if interest rates are high, people will no longer borrow money to buy things or invest in them, and they will act as if they should save money, leading to a recession in the economy.
It would be better if the economy is doing well, so I think it would be nice to keep interest rates low all the time, but if that continues, a lot of money will be spent on things that have little value, and that's what a bubble is. is.
Well, Rinko Kikuchi must have been very happy to be able to co-star with Brad Pitt.
it's babel.
When the bubble bursts, the value of the assets that were invested in suddenly drops, so the assets you own will decrease dramatically, and you will not be able to pay back the money you borrowed using those assets as collateral, leading to bankruptcy or bankruptcy. be driven into. As a result, the economy deteriorates rapidly.
However, this rate hike is being implemented to curb the second type of inflation. In the United States and Europe, prices are up 9% year-on-year.
It's like Morning Musume in its heyday. It's getting more and more when I notice it.
Similarly, by raising interest rates, money does not circulate more than necessary, and the price of things stabilizes.
Shouldn't there be inflation?
If the price of goods rises excessively, the burden on household budgets will increase, resulting in the inability to consume, and the economy will recede. It would be nice if salaries increased by the same amount, but that is not always the case.
For now, it looks like the United States will continue to raise interest rates. Even so, if inflation does not subside, raising it too much will worsen the economy more than expected.
Japan's Governor Kuroda has consistently denied raising interest rates, but it has been decided that he will step down in April 2023. The direction of the yen's depreciation will also be determined by whether the policy will change with the new governor. We will keep an eye on whether the BOJ will continue to intervene in foreign exchange as it did today.
By the way, I think controlling inflation is similar to controlling a young man who falls in love at first sight at a party and drinks only to appeal to that child.
What do you mean by
I fall in love at first sight at a party, and the tension rises steadily, and love is inflation (quoted from the LOVE machine), alcohol progresses, and I get too drunk. Gradually, everyone annoyed him, and he began to drink drinks with a high alcohol content (increased interest rates), and he suddenly became drunk and fell asleep. And from the people around me, the matter is settled and we can enjoy our time.
However, if you sometimes make a mistake in the alcohol content and amount, you will be too crushed and you will have to take care of yourself, and in the worst case, you will be accompanied to the hospital. Therefore, the discretion of the secretary (president) is important. If interest rates are raised too much, the economy will die.
I said nice things.
Kuroda-kun, bring me a cushion! I want Master Yenan to tell me.
By the way, this week we started selling Fresh Diner So's autumn/winter items. Maison Mangostin will be on sale within two weeks. It's really cute, so please take a look.
Below are the items that caught my attention.
Actitud Sweatshirt Zebra Sweatpants Purple
(Purple is synonymous with Master Enraku)
Strawberries Hoodie Gray Melange Bandana Padded Parle-Green
Brick Bell Bottom Pants Navy Gingham Polo Shirt
Sunset Tricot Cardigan
husband