01, Japanese Stock Market Plunges

This morning, shortly after the opening of the Japanese stock market, a significant decline occurred, with a drop of over 640 points recorded so far.

Last week, the Nikkei 225 index fell by 400 points, a decrease of 1.5%. The week before that, it dropped by 650 points, a decrease of 2.3%. In just half a day today, the decline has already reached 640 points, equivalent to the total drop over the past week.

In mid-August, the Nikkei 225 index reached its peak at 29,000 points, and it has since lost nearly 3,000 points.

Once the downward trend in Japan's stock market is established, it implies that the "plundering" by American financial capitalists is about to begin.

02, Yen Depreciates Further

After the Federal Reserve raised interest rates last week, the yen's exchange rate quickly broke through the 145 barrier.

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The Bank of Japan finally could not remain idle and, after a 27-year hiatus, intervened in the foreign exchange market once again. By buying yen and selling dollars, they forcibly pulled the yen's exchange rate back from 145 to 140.

However, in the following days, the yen continued to depreciate slowly. Today, the yen against the dollar fell again, breaking through 144 at its lowest point.

In November and December of this year, the Federal Reserve is highly likely to raise interest rates at two interest meetings, possibly with a cumulative increase of 125 basis points. Therefore, the trend of further yen depreciation cannot be stopped for the time being, and breaking through 145 again is just a matter of time.Of course, the Bank of Japan has also indicated that it would intervene in the exchange rate again if necessary.

However, the repeated intervention by the Bank of Japan in the exchange rate inevitably requires the consumption of a large amount of foreign exchange reserves.

03. The central bank dare not raise interest rates

The whole world is forced to raise interest rates, so why doesn't Japan raise interest rates?

Since the economic crisis in the 1990s, Japan's inflation has not been able to rise, and there is no inflation, but rather deflation, which has caused great damage to Japan's economy.

It's not easy that inflation has now exceeded 2%, but the current Bank of Japan is also very troubled. The current inflation is more driven by energy and other factors, not by the increase in domestic demand in Japan, so such inflation is likely to be only temporary and difficult to sustain in the long term.

And Japan has been troubled by low inflation levels for 30 years. Therefore, under the current circumstances, it can only insist on not raising interest rates, adhere to the continued loose policy, to maintain inflation above 2%.

Since the term of the current governor of the Bank of Japan will not end until next April, the current monetary policy is likely to be maintained at least until April next year.

It can be imagined that the yen, which does not raise interest rates, will continue to depreciate.

04. Foreign capital flees JapanAt the same time, with the depreciation of the yen exchange rate, foreign capital is withdrawing from foreign capital markets.

In the first two weeks of early September, according to official Japanese data, more than 1.6 trillion yuan of funds have already left the Japanese financial market, with nearly 900 billion yuan of foreign capital withdrawing from the Japanese bond market.

Currently, Japan's 20-year government bond yield has reached its highest level in the past six years, indicating that the price of government bonds has continued to fall. Moreover, it seems that a major bear market in the Japanese bond market is approaching.

These days, the continuous decline in the stock market indicates that funds are starting to withdraw from the stock market on a large scale.

The decline in the stock market, bond market, and exchange rate are precisely the results that American financial capitalists most want to see.

So far this year, the Japanese yen has depreciated against the US dollar by more than 25%. That is to say, buying Japanese assets with US dollars is already 1/4 cheaper than at the beginning of the year.

But for greedy financial capitalists, it is obviously not enough.

If, in the future, as foreign capital continues to withdraw, the price of Japanese assets collapses, then when the United States "goes shopping" in Japan, it can not only enjoy the benefits brought by the appreciation of the US dollar but also the benefits brought by the decline of Japanese assets.

It seems that Japan still needs to pay for the United States once again.