ひろ0723 commented on a stock · Nov 26, 2024 16:57

The tariff deal with Japan is essentially a request for rate increases.

$USD/JPY (USDJPY.FX)$ Already, by raising tariffs significantly on China, Canada, and Mexico, America is coming to nip in the bud the route-exporting of Japanese companies. The goal of setting up factories in the USA, hiring people, and paying taxes if you want to do business in America is undoubtedly clear. I think the card for the remaining tariff deal with Japan is still a request for rate hikes. According to Trump, the unfair exchange rate manipulation would be the low-interest state despite the inflationary state in import prices. In the early stages of the current policy, it is within the range of protecting domestic companies because factories cannot be built immediately, but there is a high possibility of inflation advancing. Since the tax reduction hole will not be filled up suddenly, forcibly shifting to a strong yen will result in a significant increase in revenue for export companies. If the yen rises, interest rates will also drop, fiscal spending will be constrained, truly a move that kills two birds with one stone. With a significant impact of a strong yen, there are great benefits such as filling tax reduction holes, lowering interest rates, attracting companies, expanding employment, stabilizing prices, and increasing export revenue. However, it is too late and there are many challenges with self-driven rate cuts toward a strong yen. Originally, it is taboo to interfere with policy interest rates in other countries...Maybe Trump will say it soon though, right? ^_^

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ひろ0723

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