CSV: US-Japan Joint Intervention in Foreign Exchange Markets aimed at protecting against risks arising from the continued depreciation of the yen Spill

ACCORDING TO THE CSR, THE UNITED STATES-JAPAN JOINT INTERVENTION IN THE FOREIGN EXCHANGE MARKET WAS DESIGNED TO PROTECT AGAINST RISK SPILLOVERS FROM THE CONTINUED DEPRECIATION OF THE YEN. THE MAIN DILEMMA FACING JAPAN IS THAT DOMESTIC INFLATION CONTINUES TO FALL BELOW THE YEN TARGET, THAT MONETARY POLICY HAS LIMITED INTEREST RATE HIKES, AND THAT HIGH-MARKET EARLY-MORNING CABINET TAX CUTS MAY FURTHER WIDEN JAPAN’S FISCAL GAP AND WEAKEN INVESTORS’ CONFIDENCE IN YEN ASSETS. THE CONCERN OF THE UNITED STATES, ON THE OTHER HAND, IS THAT JAPAN, IN ORDER TO STABILIZE THE EXCHANGE RATE OR REDUCE ITS NATIONAL DEBT, MAY FURTHER PUSH UP LONG-TERM INTEREST RATES AGAINST THE BACKDROP OF HIGH LEVELS OF US DEBT SUPPLY. OVERALL, THE US-JAPAN SHORT-TERM INTERVENTION MARKET HAS HELPED TO STABILIZE MARKET EXPECTATIONS, BUT THERE IS LIMITED SCOPE FOR THE JAPANESE YEN TO CONTINUE TO APPRECIATE SIGNIFICANTLY WHILE THE SPREADS BETWEEN THE TWO COUNTRIES REMAIN HIGH. THE UNITED STATES SHARE STILL HAS A MORE SIGNIFICANT ADVANTAGE OVER THE JAPANESE STOCK MARKET IN TERMS OF PROFITABILITY, INDUSTRY STRUCTURE AND AI INDUSTRIAL CHAIN。