The yen is once again overvalued against the dollar, with some voices in the market suggesting that this could lead to yen depreciation, which might benefit the Japanese economy, especially its export business.
It is claimed that Japanese companies can benefit from the fall in the exchange rate, while also enhancing the attractiveness of Japanese tourism and study abroad.
Furthermore, Japan has one of the largest overseas asset holdings in the world, with about $4 trillion in investments distributed overseas, half of which are financial assets, primarily invested in US Treasury bonds and gold.
Therefore, currency fluctuations will not have a significant impact on Japan's overseas assets and may even be beneficial.
At the same time, yen depreciation can stimulate rises in the Japanese stock market and real estate prices, both of which are advantageous to the Japanese economy.
Although yen depreciation may lead to higher import prices and domestic inflation, the negative impact on the overall economy is not expected to be significant. Thus, there is a belief that the yen's value does not match Japan's economic growth, which could lead to yen appreciation.
However, from various perspectives such as the US position, Japan's role in international geopolitics, and its international economic status, the above viewpoints do not hold.
Firstly, Japan holds huge reserves of US dollars, which poses significant risks.
These foreign exchange reserves are actually meant to meet the demand for US dollar payment settlements.
However, excessive US dollar reserves mean a serious drain on the country's wealth, especially considering that the US dollar is part of a debt currency system.
Meanwhile, Japan's political status is relatively weak, more like a vassal of the US, making it difficult to shake off the role of the US dollar.
This means that once Japan attempts to break free from the influence of the US dollar, the US may use Japan's foreign exchange reserves to exert pressure, thereby severely affecting the Japanese economy.
Secondly, Japan's position in international geopolitics is also worth noting.
Japan has been pushing the Indo-Pacific strategy, trying to find a balance between China and the US, but this also puts it at the center of the three major powers' games. Making wrong choices, especially on geopolitical issues, could lead to the yen exiting the international currency stage, thereby facing more severe economic problems.
Therefore, on the whole, the apparent improvement in the Japanese economy does not necessarily mean substantial growth.
The yen's overvaluation corresponds to the changes in Japan's comprehensive strength, and the yen has gradually lost its position as a major international currency.
Therefore, despite possible technical rebound demands, from the perspective of the international situation, the yen is gradually exiting the international currency stage, and its long-term overvaluation is also the trend.
Moreover, the Japanese economy faces many challenges, such as changes in international geopolitics, Japan's political status, foreign exchange reserves, etc., all of which will have profound impacts on the Japanese economy.
Therefore, for the future development of the Japanese economy, it is necessary to consider the influence of various factors comprehensively, rather than just from an economic perspective.
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