As the won-dollar exchange rate has been

As the won-dollar exchange rate has been surging again, it is close to reaching 1,460 won. Although the government’s strong will to suggest intervention has depressed the exchange rate since late last year, it also needs to help the global economy. Despite the authorities’ strong will to stabilize the exchange rate, if external variables cause a sharp rise in the exchange rate… The effects of such policy interventions may be diluted: external variables in exchange rates… What could there be? In the past, there was a U.S. monetary policy… Environment to shift from strong to weak global dollar… Under those circumstances, the authorities’ intervention in the foreign exchange market had a significant impact. But now, the U.S. dollar is weakening against other currencies, right? Then, what else is there this time? Yes. We need to look at the yen from that perspective. From about six months ago, the won weakened rapidly. But even under these weak trends, the won remained around 930 to 940 won per 100 yen. Yes, as much as the won weakened, the yen weakened. In other words, the won was very synchronized with the won.

The weak yen has been noticeable since last Friday, as the possibility of early dissolution of the Japanese House of Representatives and early general elections is increasing. As the approval rating of the Takaiichi Cabinet is currently high, the current Takaiichi Liberal Democratic Party will likely strengthen its power if it disbands the House of Representatives and holds elections. Then, Takaiichi, dubbed the “Girl Abe,” will be able to make a strong monetary release… This could further stimulate the weakening of the yen. The weak yen has been noticeable since last Friday when there was talk of the possibility of dissolution of the House of Representatives… This caused the dollar exchange rate, which was bowing below 1450 won, to rise. The weakening of the yen stimulated the weakening of the won together. However, the weakening of the won against the yen was not very strong, probably due to the willingness of the authorities to intervene. The won exchange rate remained around 922 won. However… The trend of the yen, which was weaker than the won, was noticeable as it fell below the KRW 930-40 box range that had been going on for a while. The weak yen itself also affects the won, but isn’t the authorities’ willingness to stabilize the foreign exchange market controlled the weakening of the won as much as the yen? That’s the interpretation.

So what conditions do we need for the exchange rate to stabilize again? Yes.. Of course, the appreciation of the yen could be the key. Issues related to the House of Representatives election could be the key to igniting the weakening of the yen, but… In addition, the U.S. check on the weak yen and concerns over inflation in Japan may play a role in pressing these issues below the surface. Personally, I think it is worth paying attention to how much wage increase will be made before or after the Japanese Spring Festival in March. If the wage increase rate is stronger than expected, the possibility of the Bank of Japan raising the benchmark interest rate may be highlighted again, raising concerns about rising inflation. I think it is one of the events that can dilute expectations for money release due to the dissolution of the House of Representatives. Future yen flows… I think it will have a decisive effect on the change in the value of the won.

And with that, we had some interesting news last Friday, not a customs Supreme Court decision… That was the news that the Trump administration was going to buy $200 billion worth of mortgage bonds. The Fed is currently on a pause in quantitative easing. It’s stopped last month in quantitative tightening, and it’s focused on buying government bonds rather than mortgage bonds, even though it’s doing similar quantitative easing. Of course, falling interest rates on government bonds will reduce mortgage rates with a lag. However, there must be a number of complex conditions to touch the mortgage rate. The Fed is not as cool as the Trump administration’s intention even though interest rates are cut… Will the Fed, which is also burdened by the growing balance sheet from purchasing government bonds, lower mortgage bond rates as it buys mortgage securities… This is… It could be a long-awaited mess. So… it’s got a lot of liquidity… The Federal Housing Finance Agency, which is also exerting tremendous power in the short-term bond market, is considering buying $200 billion worth of mortgage securities through two institutions, Fannie Mae and Freddie Mac. Trump’s announcement sparked the Federal Housing Finance Agency Commissioner Bill Fulte’s willingness to do so immediately.

By the way… This Pultera is Trump’s signature godfather, since he took office as Federal Housing Finance Commissioner early last year… He openly supported Trump. For example, he emphasized the need for the removal of Fed Chairman Powell, and he pressured Fed Director Lisa Cook into a mortgage fraud. He’s actively working on policies that are in line with Trump. Once the 10-year government bond rate comes down… This leads to a drop in mortgage rates. And a drop in mortgage rates increases people’s ability to buy a home. Housing transactions become more active… This gives the housing market the same liquidity as loans. The burden of very high interest rates over 6% and housing prices that have gone up too much… It’s gotten so hard for Americans to buy a house. So, the stabilization of mortgage rates on the 10-year Treasury note, and the subsequent revitalization of the housing market could improve the performance of Fannie Mae and Freddie Mac. These two companies became nationalized right after the financial crisis. Trump foresees the listing of Fannie Mae and Freddie Mac. If the stock price of both of them is high in the process of selling some of their shares in a company that the state owns, then there’s a significant national return on investment. Maybe we could pay off the national debt with this money? That’s why we’ve had this kind of story coming out over the last year.

Fannie Mae Pursues Freddie Mac Listing… U.S. Mortgage Market Forecasts Big Change” (Finance Today, 25.10.22)

Possible privatisation of state-owned enterprises… And if you’re more likely to push these two… What were the shares of these companies like? FYI, Fannie Mae, who stayed at $2 a week in early November of 24 when Trump was elected, jumped to $15 in September of last year, less than a year later. Yeah, seven to eight times in a second