The rate of increase in Japan's consumer prices (excluding fresh food) in October was announced on November 18th at 3.6%, the first level in 40 years and 8 months since February 1982.
The historic depreciation of the yen is adding to the soaring energy and food prices.
How far will the yen depreciate and prices rise?
Will the momentum of wage increases catch up with price increases?
And what will happen to our lives and the Japanese economy?
We questioned 25 experts, including leading economists, economics researchers, and former Bank of Japan executives.
This time, we will explore the whereabouts of the depreciation of the yen with the “collective wisdom” of 25 people.
(Economics Department reporter Aya Shinoda/NHK special coverage group)
*The results of the interview will be shown in the NHK special "What will happen to Japan due to the depreciation of the yen and price rises in Japan? Approaching with the collective wisdom of experts", which will be broadcast on General TV from 10:00 pm on the 19th. I will tell you in detail.
From a historic depreciation of the yen to a reversal in the direction of a strong yen.
At the beginning of this year, the yen exchange rate was around 115 yen per dollar.
On October 21, the yen depreciated to $1 = 151.90 yen.
After that, there were a series of cases in which the yen exchange rate was pushed back to a weaker direction after market intervention by the government and the Bank of Japan. , the yen fluctuated in the direction of appreciation.
1 dollar = 137 yen range.
The sharp turn in the yen's exchange rate was due to the spread of speculation in the market that the pace of interest rate hikes by the Fed in the United States might slow down.
What will happen to the yen exchange rate in the future? When we asked
25 experts about the expected exchange rate level next year, the end of 2023, 19 people responded.
The expected range is 30 yen from 120 yen to 150 yen.
▽ Of these, 4 people in total "130 yen" and "about 130 yen".
Combined with the forecasts of "130 yen", "132 yen", "133 yen", "135 yen", and "138 yen", 10 people expected the 130 yen range.
▽In addition, looking at the answers of experts who forecast in a long range, there are forecasts in the 130 yen range, such as "125 yen to 135 yen", "120 yen to 140 yen", and "132 yen to 147 yen". There were 3 people.
▽ On the other hand, 4 people expected the price to be in the 120 yen range, "120 yen" and "125 yen".
▽ One person expected "140 yen" and the 140 yen range.
▽ "150 yen" was one person.
What is the basis for your prediction?
What is the basis for each prediction?
All experts focused on the interest rate differential between the United States and Japan.
This is a graph that overlaps the interest rate difference between the two-year government bond yields of Japan and the United States and the dollar-yen exchange rate.
The United States continues to raise interest rates sharply to curb inflation, while Japan continues to unwaveringly ease monetary policy.
Since January this year, the interest rate differential between Japan and the United States has expanded rapidly.
In line with this, the yen depreciates rapidly, and the interest rate differential and the yen exchange rate almost match.
Exchange rates fluctuate due to various factors, but the biggest focus right now is on trends in US monetary policy.
Many experts believe that this situation will not change for the time being.
However, the reason for the 30-yen difference in the range of forecasts for next year is that there are divergent views on the direction of US monetary policy.
Trends in U.S. Monetary Policy Diverging Opinions
Furthermore, even among experts who believe that the yen is going to appreciate, their views are divided on the speed.
Mr. Yuichi Kodama, Meiji Yasuda Research Institute, "Forecasting 1 dollar = 120 yen
.
"・Ms. Harumi
Muguruma
of Stanley Securities "Forecasts 1 dollar = 132 yen to 147 yen."
I expect the dollar's strength to peak out gradually."
On the other hand, some experts who believe that the yen is under strong pressure to depreciate still point out structural problems in Japan.
Ayako Fujita of JP Morgan Securities "1 dollar = 150 yen forecast"
"The interest rate hike in the United States will eventually end, and the economic cycle will change, and it will be dissolved. There are structural problems such as slowing growth.”
What are Japan's "structural problems"?
What exactly is a "structural problem"?
Several experts have pointed out that it is becoming difficult to enjoy the benefits of a weaker yen.
Takahide Kiuchi, Nomura Research Institute
"Since the Lehman Shock, Japan's trade structure has changed, and companies have increased their production overseas. As a result, even if the yen weakens, they will become more competitive and exports will increase. A structural change is taking place in which the positive side of the yen's depreciation has diminished."
In addition, some said that the attractiveness of Japan as an investment destination and of the yen has declined. .
Mr. Izuru Kato, Totan Research
"There are few companies that can adapt to the digital age, and due to the declining and aging population, the Japanese economy does not look attractive from overseas, and it is difficult to attract good investment. As for the future, if many people think that the economy will grow, it would be desirable for the currency to be bought, and as a result, a positive appreciation of the yen would occur, but unfortunately it is currently going in the opposite direction.
What do you want from Japan?
So what should Japan do in the future?
We asked 25 people to give keywords and answer.
What many experts gave was "a wage increase."
Achieving wage increases that exceed price increases and creating a virtuous cycle of the economy.
Experts agreed that this is the direction we should aim for.
Next week's column will introduce experts' responses to the question of how to achieve wage increases.
In addition, there were many experts who raised the keyword of "taking advantage of the current depreciation of the yen."
Mr. Shinichiro Kobayashi, Mitsubishi UFJ Research & Consulting
"It may be possible to increase exports of items that have not been exported in the past due to the depreciation of the yen. For example, agricultural products are one of the candidates. I hope the yen will be so weak. If this is the case, Japanese agricultural products will become more price competitive overseas."
Also, structural problems should be overcome by improving Japan's national power, such as "earning power" and "improved productivity and potential growth potential." I've seen a lot of comments that it is.
Hideo Kumano, Dai-ichi Life Research Institute
"The yen has been depreciating for the last 10 years, and corporate managers have fallen into a fear of a strong yen. In order to change this, it is necessary for the company itself to improve its constitution. It is exactly the "earning power", and if a company can expand globally and earn money in any currency, whether it is a strong yen, a weak yen, dollars, euros, or yen, the trauma of a strong yen will be overcome little by little. The
collective wisdom of the 25 experts and future forecasts of the market differed in some areas, but there were many points in common with regard to the structural issues facing Japan and prescriptions for overcoming them. felt.
NHK Special "What will happen to Japan due to the depreciation of the yen?
attention schedule
On the 24th of next week, the minutes of the FOMC (meeting to decide the monetary policy of the United States) held until November 3, Japan time will be released.
The Fed has continued to raise interest rates significantly so far, but it has attracted a great deal of attention in determining the pace of future monetary tightening.
On the 25th, the consumer price index for Tokyo's wards will be released.