According to the latest official data, the rate of inflation primary in Japan Last August, 2.8 percent on an annual basis, at the highest level since 2014, contributed to it, especially the rise in energy prices.
Global Markets Analyst, Raed Al-Khidr says: " With the aim of combating high inflation, central banks More monetary tightening measures, while some resorted to raising interest rates, other banks decided to take another step, which is to intervene in the market foreign currency Directly, the policy varies Central Japan Compared to other banks, it has kept interest rates at -0.10 percent since 2016 at a time when central banks are racing to raise interest rates, and follow the policy of controlling the yield curve of short- and long-term bonds, by buying or selling them with the aim of keeping them within a certain return level.".
Al-Khidr explains in his speech to the site "Sky News Arabia economy: "With the continued decline of the yen in front of US dollarThe Central Bank of Japan decided to intervene to protect its currency for the first time since 1998, by starting to sell its holdings of US bonds, which are considered one of the safest assets! This event coincides with the US Federal Reserve’s rush to raise interest rates in order to contain high inflation".
Al-Khidr explains: "It is common knowledge that when selling government bonds, the return on these bond It starts to rise due to the increased supply of it and the need to pay a higher return to make it more attractive to those who want to buy tools ReligionIndeed, the markets witnessed a strong rise in the yields of US ten-year bonds until they reached their highest levels since 2008, and high bond yields negatively affect stock marketsbecause some investors prefer higher bond yields and safer assets rather than stocks that are considered high risk compared to bonds.".
The global markets analyst notes that the Japanese central bank was not the only bank that decided to sell part of its holdings of US government bonds, as it was preceded by the Central Bank of Korea and the People’s Bank of China.
In turn, the economist, Hussain Al-Qamzi, returns Japan’s reduction of its possession of US Treasuries To trying to enhance the value of the yen, he adds: "Japan has intervened in the global exchange market to control its currency, as the US dollar has risen significantly since the Federal Reserve started raising interest rates last March, and this trend is expected to continue, which will put huge downward pressure on other currencies, including the Japanese currency.".
Al-Qamzi explains to "Sky News Arabia website" that "depreciation Japanese currency Benefit exports But it increases the cost imports At the same time, most goods in the world are priced in dollars, which makes them expensive for the Japanese factory, and now that the prices of food and raw materials have reached historical levels due to the conflict between Ukraine and Russia, the industrialized countries in Asia are under tremendous pressure to guarantee imports, and Japan when selling them for Treasury bonds It gets the dollar with which it buys the yen and thus the value of the yen rises, so it can approach the exchange rate you want by buying and selling in dollars".
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and record dollar Its highest in front of yen In 24 years, exceeding the level of 145 yen to the dollar at the end of last September, in which Japan spent 2.8 trillion yen, or 19.34 billion dollars, to intervene in the foreign exchange market to support the yen.
According to the latest official data, the rate of inflation primary in Japan Last August, 2.8 percent on an annual basis, at the highest level since 2014, contributed to it, especially the rise in energy prices.
And global markets analyst, Raed Al-Khidr, says: “With the aim of combating high inflation, I took central banks More monetary tightening measures, while some resorted to raising interest rates, other banks decided to take another step, which is to intervene in the market foreign currency Directly, the policy varies Central Japan Compared to other banks, it has kept interest rates at -0.10% since 2016 at a time when central banks are racing to raise interest rates, and follow the policy of controlling the yield curve of short-term and long-term bonds, by buying or selling them with the aim of keeping them within a certain return level. .
Al-Khidr explained in his interview with “Eqtisadiah” Sky News Arabia: “With the continued decline of the yen against US dollarThe Central Bank of Japan decided to intervene to protect its currency for the first time since 1998, by starting to sell its holdings of US bonds, which are considered one of the safest assets! This event coincides with the US Federal Reserve’s rush to raise interest rates in order to contain high inflation.
Al-Khidr explains: “It is well-known that when selling government bonds, the return on these bonds is the same bond It starts to rise due to the increased supply of it and the need to pay a higher return to make it more attractive to those who want to buy tools ReligionIndeed, the markets witnessed a strong rise in the yields of US ten-year bonds until they reached their highest levels since 2008, and high bond yields negatively affect stock marketsSome investors prefer higher bond yields and safer assets rather than stocks, which are considered to be more risky compared to bonds.
The global markets analyst notes that the Japanese central bank was not the only bank that decided to sell part of its holdings of US government bonds, as it was preceded by the Central Bank of Korea and the People’s Bank of China.
In turn, the economist, Hussain Al-Qamzi, returns Japan’s reduction of its possession of US Treasuries To try to strengthen the value of the yen, he adds: “Japan has intervened in the global exchange market to adjust its currency, as the US dollar has risen significantly since the Federal Reserve started raising interest rates last March, and this trend is expected to continue, which will put enormous downward pressure on the dollar. Other currencies, including the Japanese currency.
Al-Qamzi explains to the “Sky News Arabia” website that “the depreciation of the value of Japanese currency Benefit exports But it increases the cost imports At the same time, most goods in the world are priced in dollars, which makes them expensive for the Japanese factory, and now that the prices of food and raw materials have reached historical levels due to the conflict between Ukraine and Russia, the industrialized countries in Asia are under tremendous pressure to guarantee imports, and Japan when selling them for Treasury bonds They get the dollars with which they buy the yen, so the value of the yen rises, so they can approach the exchange rate they want by buying and selling in dollars.”