Sino-Singapore Jingwei, July 14th. On the 14th, the performance of the Asia-Pacific foreign exchange market was even weaker, of which the yen continued to fall.

Data show that the exchange rate of the Japanese yen against the US dollar in the Tokyo foreign exchange market once fell to above 139 yen per US dollar, hitting a new low since September 1998 (about 24 years).

　　Trend of USD/JPY (as of 17:40 on July 14, Beijing time) Source: Wind

　　In the previous trading day (July 13), the yen exchange rate hovered around 137 yen per dollar.

　　According to a report by the Nikkei Chinese website on the 14th, the market has a view that the Federal Reserve may continue to implement rapid interest rate hikes due to concerns about continued high prices in the United States.

This is in contrast to the Bank of Japan (central bank), which maintains large-scale monetary easing, and tends to accelerate the trend of depreciation of the yen and appreciation of the dollar.

　　On the evening of July 13, Beijing time, the U.S. Department of Labor released data showing that the U.S. CPI rose more than expected in June, up 9.1% year-on-year, a new high since 1981; a month-on-month increase of 1.3%, a new high since 2005.

The core CPI increased by 5.9% year-on-year and 0.7% month-on-month, and the month-on-month increase was slightly larger than that of the previous month.

　　After the data was released, the market's interest rate hike expectations increased again. It is expected that the Federal Reserve will raise interest rates by 75 basis points this month, and the possibility of further increase is not ruled out.

At the Fed Open Market Committee (FOMC) meeting, Fed Chairman Powell is likely to put a hawk again, resolutely expressing his attitude to curb inflation.

　　Japan's Kyodo News reported on the 14th that in view of the market forecast that the Federal Reserve will accelerate the tightening of monetary policy to curb historical inflation, the interest rate gap between Japan and the United States will widen, and the trend of buying dollars and selling yen is dominant.

　　The report also said that in addition, there is a view that in order to curb high inflation, the Federal Reserve will decide to sharply raise interest rates by 1% at the Federal Open Market Committee later this month, which is equivalent to 4 times the normal operation.

As a result, markets are again aware of the difference in monetary policy with the Bank of Japan, which maintains massive easing.

　　Another report from Kyodo News on the same day said that in view of Japan's Liberal Democratic Party's great victory in the Senate election, Japanese Prime Minister Fumio Kishida will fully start the selection of the successor of central bank governor Kuroda Haruhiko (77).

　　According to reports, Kuroda Haruhiko has continued to update the longest record in history. If he resigns on April 8, 2023, it will be more than 10 years.

Shortly after taking office, Kuroda continued to implement a large-scale monetary easing policy to support the economy. As a measure of large-scale monetary easing, the Bank of Japan bought a large number of government bonds issued by the government for borrowing, and controlled the long-term interest rate ceiling at "about 0.25%. ".

Kuroda said that until the economy improves and wages rise above prices, "money easing will be pursued perseveringly".

　　However, the report also pointed out that the side effects of the policy were manifested in the form of the most serious depreciation of the yen against the dollar and rising prices in about 24 years.

Whether those who have a positive attitude towards getting rid of the easing policy are selected as successors has become the focus of attention in the future.

　　According to the report, the reason for the depreciation of the yen is that compared with the practice of European and American central banks to raise interest rates to curb price rises, Japanese interest rates are lower, and the yen is considered to be unfavorable for asset utilization.

Hideo Hayakawa, a former director of the central bank, believes that "inflexible policy application has led to an accelerated depreciation of the yen."

　　In addition, among market stakeholders, there are many views that the change of the Bank of Japan governor is a good opportunity to revise monetary policy.

(Sino-Singapore Jingwei APP)