00:00This was a surprise without a speck of doubt because basically we knew that Bank of Japan was being cornered,
00:07but we didn't think the Americans would be joining in to help them out at this point at least.
00:12To me, it just shows me the desperado situation of Bank of Japan where they had to ask for the
00:18U.S. to help them out,
00:20not possibly inferring that Japan do have the largest amount of U.S. Treasury and Japan does not want to
00:29go into a situation of selling them.
00:31Now, the yen had fallen to its weakest level in around 40 years.
00:37What, in your opinion, is driving that decline and why has it become such a pressing issue for Japan's economy?
00:45Well, partly because our potential growth rate is under 2 percent.
00:48We are showing a comeback, but in comparison to the United States,
00:53which has a lot of maneuverability to basically increase their rates.
00:57In case of Japan, they do not have that, considering the fact that, again, we're showing signs of recovery.
01:04We're having a very good cap to expenditure coming back on back of AI investment, digitalization, rationalization, what have you.
01:11But the private consumption really isn't back on their feet.
01:14And also, if you consider the fact that, you know, we might be seeing a first wage rise in over
01:1920 years,
01:20but that could be washed away by this inflationary fear that we have.
01:23So we have a lot of anxiety here.
01:26And I'm very sure that Bank of Japan is not really eager to increase the rates at this point,
01:32because that would basically jeopardize a comeback scenario.
01:35Of course, currency intervention could provide an immediate boost, couldn't it?
01:41But what sort of lasting effect do you think that might have?
01:45Well, that's a good question.
01:46And the fact of the matter is, I think it may last for maybe a couple of months.
01:52And the market participant may be quite worried about, you know, possible intervention,
01:57because it's a joint intervention.
01:58Single intervention do not work, but joint intervention in the past has worked.
02:03So they do realize that it is not only the power, but the regulatory issues
02:07and very other issues that could, you know, basically turn the tide around.
02:13But again, for rather short term, because again, I repeat the point.
02:17At the end of the day, it's the fundamentals.
02:20It's the interest deviations.
02:22And unless the fundamentals are at least not necessarily improving,
02:28but showing signs of improvement, you know,
02:30I don't think the fundamentals is going to change,
02:33meaning that the trend of weakening in will continue towards the end of the year.
02:38If we are merely going to see this joint intervention.
02:41The U.S. seems to have been selling euros, doesn't it, in order to buy yen.
02:46Why would they not just sell dollars?
02:50Well, one of the things that I think U.S. administration
02:54has been constantly claiming is a strong dollar.
02:58And at this point, you know, I don't think they're at the point of saying
03:03that we need to basically change the policy.
03:06So that's one of the reasons why, you know,
03:08they don't really want to really change their initial policy or agenda that they've set.
03:15Here we go.
03:15All right.
03:15All right.
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