It was yesterday when I had high expectations for Japan’s interest rate hike. Expectations had only ended with expectations. I also felt that I might now be a bit of an inertia. I don’t think Japan is right for me in many ways. In the past, when I lived in an apartment in Ichon-dong, I suffered from floor noise caused by Japanese families living upstairs, but I don’t think all of them are considerate of others. I think I thought that I didn’t have to do the so-called “tatame” because it wasn’t my country. Anyway, I can never forget Japanese families who are not cheap.

The writing is missing. The Bank of Japan (BOJ) left its interest rate unchanged on Wednesday, and the yen rose above 158 yen to the U.S. dollar on Wednesday. Ueda gave a signal to the market that there was no intervention in the foreign exchange market as well as a rate hike, paving the way for the yen to rise to 160 yen. There may be many opinions on the reason why the Japanese government did not intervene in the market or raise the interest rate despite the weakening yen, but it seems that it is determined that the rate cut will be delayed at a time when the U.S. inflation is not caught. Moreover, Japan, which really wants to get out of the depression for the first time in decades, has yet to see any worrisome inflation, so I think it has revealed itself that it has not wanted to disrupt the economic recovery that has just begun before more inflation appeared. Considering that the CPI in Tokyo in April is still rising 1.8 percent, it seems that Japan seems to think it is better to enjoy the yen lower than expected.

At the last Korea-U.S.-Japan Economic Ministers’ Meeting, I made a mistake by exaggerating the oral intervention message. On the contrary, I assume that there was a behind-the-scenes agreement because Japan’s disregard for the yen would be difficult without U.S. approval. For the U.S., it is an operation to keep the strong dollar to check China, and to drive China to a corner, which has already been forced to cut interest rates due to overproduction and real estate problems. I think the U.S. also had its intention to attack both the left and right sides by maintaining the strong U.S. dollar and high interest rates, and adding a weak yen.

The U.S. considers Japan to be a partner and a bridgehead for maintaining Asian order in Northeast Asia. You should think of it as a stronger relationship than we think. The U.S. is blatantly investing in semiconductors in Japan and foreign investors are increasing real estate investment due to the cheap yen. The real estate market, which is already worried about the disappearance of the Dankai generation, is reviving.

Unless the U.S. neutral interest rate remains in the 4% range and geopolitical risks such as the Hamas war in Israel and the war in Ukraine are eliminated, I think it will be difficult to expect a weakening of the dollar for the time being. However, looking at the dollar index itself, there are reasonable doubts that the yen’s weakness against the dollar alone, as it did yesterday, is politically motivated.

Now, the coins fall to the ground and everyone knows the outcome. The game is to win and lose. It is still worrisome how we see the yen falling. It is because of domestic prices. On the other hand, Korean people and companies, which have become more knowledgeable in finance, are already increasing their investment abroad. It is said that foreign financial investment exceeds 150 trillion won. Now, it seems that foreigners invest more overseas than they invest in Korea. And like Japan, companies are expanding their production bases overseas. There may be an era when more dollars stay abroad than dollars flow into Korea.

The era of high interest rates and high exchange rates is here, and I think this may become the norm for a while. I think the U.S. should accept and admit the high exchange rate until the dollar falls due to fiscal burdens or economic downturn. I admit that I made a mistake in prematurely judging the intervention of the Bank of Japan at 155 yen due to inertia during the past trading days. Fortunately, the U.S. Big Tech’s good performance gave a big profit, but I think we should take a cool-headed, broader view of the market. Still, I’m afraid to invest. I analyzed the weak yen yesterday with a short knowledge, and my head is going to explode. In English, it is called My brain is fried. As lunch is near, I’m craving fried food. The weather is very nice. Have a happy weekend.