SimplifiedPrivacy.com on Nostr: Fast Bird's Eye View of Market Collapse: --From 1993 to 2021, Japan had essentially ...
Fast Bird's Eye View of Market Collapse:
--From 1993 to 2021, Japan had essentially no inflation
--From 2021 to now, Japan's inflation is rising
In response to this:
--Bank of Japan raised interest rates
--This strengthens the Yen
At the same time:
--US Federal Reserve is lowering
--Weak US jobs
This sent the USD to Japanese Yen exchange rate down.
(weak dollar, strong yen)
Because:
Since 1993 Japan's currency has been nearly free to borrow
And the central bank can print as much as it wants
Then:
Everyone and their mother borrows yen (at lower interest rates) to buy assets overseas at higher yield,
But now:
Huge players are having to pay more to borrow,
As the exchange rate moves against them,
Therefore:
They sell.
--From 1993 to 2021, Japan had essentially no inflation
--From 2021 to now, Japan's inflation is rising
In response to this:
--Bank of Japan raised interest rates
--This strengthens the Yen
At the same time:
--US Federal Reserve is lowering
--Weak US jobs
This sent the USD to Japanese Yen exchange rate down.
(weak dollar, strong yen)
Because:
Since 1993 Japan's currency has been nearly free to borrow
And the central bank can print as much as it wants
Then:
Everyone and their mother borrows yen (at lower interest rates) to buy assets overseas at higher yield,
But now:
Huge players are having to pay more to borrow,
As the exchange rate moves against them,
Therefore:
They sell.