Why the Japanese Yen is Collapsing
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- Опубліковано 30 кві 2024
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In this video, we look at Japan’s funky economy; why the yen is declining; and what might happen next.
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Japan has been living in the year 2000 since the 1980s
they're still living in the future compared to countries that think they can go broke in their own currencies
@@grimaffiliations3671and those countries are?
Ye they still youse fax on work and not mail
@@Zunken12その西洋プロパガンダってそんなに君達の自尊心を高めるの？ちなみに米国の方が使用率高いよ。
@@user-wt2ci3mq4kusage rate of what? Paper? In businesses only? And not for physical backups or contracts but literally for things like messages and letters?
“Developed, undeveloped, Argentina, and Japan”
Quote of the day
What does argentina mean in this context.
@@phantomgaming563 Argentina and Japan are kissing cousins, both print like mad....except Argentina doesn't produce anything and Japan does.
Argentina has lots of relatives in Europe.
@@doctordetroit4339ayoo sus.
@@phantomgaming563 Basket case. Look at a graph of anything about the Argentine economy, it goes from economic powerhouse to almost bankrupt in like 10 yr cycles
Argentina is unsuccessful despite economic predictions that it should be successful. The opposite of Japan who becomes successful against economist's predictions.
A Japanese living in Japan here. Around March, I was checking Amazon for various products to put down a lawn in my yard, and where the Gardena sand rolling tool was in the 6000 yen range, I see now that it is in the 8000 yen range. The price of other tools must have gone up as well, so I have given up on putting up the lawn this year for now. I'll see how it goes and do it next year, but there is no guarantee that it will be in better condition by then.
yeah thats part weak yen and just inflation. our prices for things has gone up 40% or more too.
I would trade expensive gardening tools for affordable, housing here in California. 😭
Prices have increased all around from high inflation. Insurance, housing and gas are the ones that worry me the most.
You can blame Russia. The world had just left covid crisis and slowing recovering when Russia decided to lanch a war in Europe.
C
The lost decade of Japan was due to the Plaza Accord between the US, France, Germany and the UK, and more importantly by the forced ending (demanded by the US) of the Window Guidance state credit system in Japan. Window guidance (credit lending by the state via the Bank of Japan and not by private lenders via private stock exchange) is seen as the most important financial and monetary policiy that made the Japanese economic miracle possible.
If Japan’s economy is considered “collapsing” then what does that make my country 😭🇳🇬 we must have collapsed to the depths of hell at this point
Zimbabwe🇿🇼 : _"Hmph... Amateurs 😏 "_
Your government has connections to Boko Haram 😂 what do you expect.
Who was the guy who said "an ex boko Haram can do everything in Nigeria even become president, opportunities are there for them"
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the yen is considered collapsing, not the economy. if wages and prices keep up noting much really changes.
Me a pakistani looking at my country's economy:
IT'S OVER😔.
@@IK_MKtrue, it could be worse we could be Zim or Venezuela
Standard of living is extremely high in Japan. Food and drink are fairly inexpensive. Low growth is still progress, and people like stability and predictability. Japan reached its "mature economy" status quickly.
They don't allow inflation.
They prioritize quality of life over economic growth. If you're an investor, this is terrible. If you're a human being, this is the best case scenario given the situation
@@everythingisfine9988 Yeah, QOL is much better for the people, but it still needs to be handled properly or there could be more dangerous consequences for the people. Still better than focusing on Economic Growth all the time and sacrificing your people.
problem is what to do when most of your population is living off pensions, as they're currently almost reaching in Japan. Maybe they can make it work, but in any case it will be interesting and informative for the rest of the low-birthrate world
it was Reagan causing yen to rise in value because Detroit cant compete with the Japanese auto. So the yen was political force to stay below 120 until Covid when the interest differential with US expanded .
pacing is SO important
there are a lot of videos that I can't watch because all of the information is disorganized and spewed out at once
this video has a VERY steady pace, easy to metabolize, really appreciate that!
Japan's lost decades were largely triggered by the USA who were in the late 80s downright paranoid about that country's ascendance in manufacturing. Those old enough to be an adult then will remember it well. In the 1980s the yen was 220 to the USD and it was an export led economy that had eye-watering trade surpluses with every developed country in the world. Through a combination of political pressure and currency manipulation (which the USA was uniquely able to do due to the power of the petrodollar, especially in those days), they forced the YEN to appreciate to 110 to the dollar making Japanese goods twice as expensive to crater its exports, and crater it did. With corporate profits tanked, companies stopped investing. Whereas this would normally result in a deep recession and high unemployment for a few years before growth returned again, _as Japanese culture view lay-offs as anathema,_ they retained their employees and depressed wages instead. So we have this unique scenario of consistent near full employment with deflationary pressure instead. Lower energy prices (stronger currency buys more barrels for the same amount) also put deflationary pressure on goods manufactured for the domestic market. Stagnant wages + deflation, of course people are gonna tighten belts. With C & I & X gone for ye old C+I+G+(X-M) formula, of course doemstic asset prices and financial markets also crash and a vicious circle occurs.
As a side note, Japan's lost decades helped open the door for Korea and China rise. Once upon a time, you can't go to the electrical section and find it filled 90% with Japanese products, now it's filled with Korean and Chinese TVs and refrigerators. In the case of the latter, perhaps the tale will have an ironic twist whereby America's fear of Japan helped a create a bigger dragon to rise and this was one is nowhere near as friendly to the US as Japan was/is.
You ultimately lay the blame on the US and yet you yourself mention numerous serious mistakes that the Japanese themselves engaged (and continue to engage) in that have greatly worsened and prolonged their recession.
The US, fncking countries over since after World War 2
@@yuyutubee8435but it's true. US been fncking countries over.
Every Asian knows that the collapse of the yen is because the United States is harvesting yen to fill the domestic deficit. In fact, Japan also knows this, so it sold some US bonds. Only the naive Westerners don't know that the United States is so shameless.
@@yuyutubee8435i wouldn’t say they’re mistakes. Japan still maintained a high standard of living (maybe even higher than that of the US when you account for things like healthcare, public safety, housing affordability, and public transit) low unemployment and is home to some of the biggest companies on this planet. Hardly mistakes, any other country would be glad to have this standard of living and worldwide recognition in various fronts such as entertainment and technology.
2:38 "The bubble burst, and continued to burst for a while"
I don't know why that caught me off guard
That's the most confusing statement that I've ever heard.
More like, it never reflated.
It surprised the Japanese too
Japan copied Bangladesh flag 🇧🇩
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The quest for infinite growth on a planet with finite ressources. What could go wrong?
Profile pic fits comment.
Why do people keep repeating this? More resources aren't the only source of growth. Improvements in technology contribute to growth too by increasing efficiency of resource usage and making more resources available - e.g. better extraction and material processing methods.
@@user-hz6fj9xy4y Sure technology can increase the theoretical cap but unless technology can literally produce raw material out of thin air, GDP will always be finite.
@@googane7755 finite yes, but we may have a few years to go before everything is set to stagnate. If we had 200 years of growth it would be practically infinite for any single human being, while if it was something like 10 or 50 it would actually be a fair point. Although with things like AI and fusion energy still left largely undiscovered, i kind of think we have at least 100 years (when fusion is finally ready lol).
@@Broniath We have enough resources for everyone on earth right now to live a life of abundance. You can Infinite growth but still have beggars, it's how its distributed that's important.
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As a manga/doujin collector, the yen being 168yen for one euro has been a blessing. I've been buying SO MUCH STUFF.
(I'm also keeping an account in yen just for this, so if the yen bounces back up i'll still have some cushion)
I hope hope they'll get better though, because i know locally it's awful.
Do you buy the physical or the digital one?
Where do you buy them from? Asking for a friend😂😂
@@vijaz5559 mostly Mandarake and booth (I have a local address for shipping, but Mandarake ships internationally)
@@Rikai644 physical!
@@vonigner Nice
Can you provide your sources? Especially the Data for the Graphs
Foreigners look at Japan's situation and feel as sad as watching an old person slowly die, but one thing is sure: everyone has to go through it. If you want your country to live long, do not want your country to be too rich.
Great video, very informative. Consider changing the typography for definitions and graphics - it’s difficult to read when it’s all written in capitals and lettering isn’t adequately spaced. Thanks
I love this Woman's delivery vs the previous host. Tone, Cadence, Pitch, Pronunciation etc. all improved for the channel with this woman
The other host feels like he’s yelling all the time.
Yes. No more pronouncing "assume" like "ashoom".
tbh she feels too good, she feels more like a tv presenter than a yt presenter.
Yeah, she's the best news presenter on TLDR.
Too monotone
It is the currency collapsing, not the economy.
Which will lead to the economy collapsing as well.
As was seen with turkey.
@@phantomgaming563 It won't. The Japanese economy actually grew higher than it ever was in last 30 years. Economy is more complex than currency go burr.. this is going to make Japanese exports cheaper for everyone. Currency appreciating was the issue due to which Japanese economy collapsed
@@kevink7529did you forget about GDP per capita.
Or housing prices.
Or the price of food and various other essentials.
@@insanebe1and said population crises will inevitabily lead to an economic collapse.
@@kevink7529 I'm confused. If Japan's current economy is the highest in 30 years, then why is its GDP still lower than it was in 1995? Last time I checked, it's only around $4 trillion now, compared to the $6 trillion peak in 2012. Also, during my five years in Japan, I've seen more and more people here getting fed up with their salaries, especially as everything keeps getting pricier.
But then I pretty well remember around 1996 I just arrived in Japan from Brazil as a manual laborer. And there was this Brazilian in my workplace who was going back to Brazil with like 70,000 US dollars saved. He already exchanged at 152 yen because, as everybody at that time thought, the tendency is to ONLY devalue and the sooner the better to dollarize it. And then in a matter of weeks it went below 130... Bottom line is you never ever know.
love the video!! im writing an essay for this topic right now so thanks for the quick facts! is there any way you guys can make a link or qr code to your sources at the end of the video so i can reference them? I’ll also be citing your video as well so thank you! -Gray
You should have a better accurate reference if you write an essay, not this biased perceptions only.
@@dicekatosounds like you don't like facts
@@brad5426 Facts also have two sides as a matter of fact. Do not go monotheistic way unconsciously. I love real facts not twisted ones.
@@dicekato why would they need to twist facts and not state them clean? You have not addressed what their bias is.
@@brad5426 this is just typical media news. What are typical media biases? So many.
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None!!!! considering the present unpredictable market volatility there are over a thousand reasons why the market is a no go especially now.
Not true at all... Although the market isn't so stable at the moment, it isn't as sick as some people have made it look... In all honesty, as a beginner who knows next to nothing, I have made over $12k net-profit just in a couple of months... I'm a retiree, and I am using these extra resources to help pay for odds and ends that I want.
NO I have never used a spreadsheet.. It's of no relevance to me... I work with Kelly Marie Matwick she's good and regulated.
It is not a good idea to ask strangers on the internet for financial advice especially somewhere like YT comments where there is zero requirement from someone to know about the topic. If you have money to invest either go consult an expert, or at least watch a lot of serious and trustworthy finance UA-camrs, compare them to eachother and in addition do as much of your own research as possible. However, no matter what, do not expect a next Apple or Microsoft, I think it is better to invest in something that sees modest but steady and reliable growth with minimal risk.
@@user-ht1vg5we2p These are bots. Ignore them.
Japan needs to get its manufacturing sector up and running again. A cheap yen would make its exports very attractive.
I miss the Made in Japan quality of 80s and 90s. Don't know if they can get back to that quality level after 20+ years of decline.
Don't worry, the US is working on reviving the Japan manufacturing sector since it's now ditching China.
Japan has a bigger problem. Ageing population. Low birth rate...
Unfortunately with how weak the yen is and how resource poor Japan is… importing would be unappealing…
it wont happen because multinational corporations always aim to invest in cheapest countries. they are looking to manufacture in south asia and southeast asia, which are still much much cheaper than japan
@@donnieamz2938 plus Jp has an ageing population. Countries like Vietnam and Indonesia have a very young population and can offer cheaper services
My American colleague here in Japan has to pay his student loan, and with such a low Yen, he's really struggling to do so.
So an unexpected consequence is that young educated Americans won't come to live in Japan for a while.
Lots of talented people leave Japan due to the falling yen... Especially Software engineers and AI researchers. Japan already had small salaries, but now... That's sad...
The same thing has happened to the UK. In 2007 £1 was $2.05 and now it's 1:1
It took me a bit to figure out the colleague had studied in the US and moved to Japan afterward. Maths weren't mathing until then ^_^'
Lol. He should be taking online classes and getting an in school deferment
There may be less Americans moving to Japan for work, but more tourists will come to spend money since the exchange rate is in their favor.
As a Turkish person living in Japan for 3 years, I can easily say that it's really similar to the beginning of the Turkish economic crisis, and LDP keeps postponing to act for a real fix or solution for their own political benefits. It would be so sad if they kept postponing taking the required steps as the Turkish government did and let this problem get worse and worse.
Japonya'nın kendini tekrardan kalkındıracak gücü ve enstitüleri var ama ben de bazen Japonya'yı Türkiye'ye çok benzetiyorum.
There is a difference. Japanese debt is 90% owned domestically. Japan is the only economy that run on the principles of a collective capitalist model. Furthermore, Japan has 17 trillion USD in private savings and assets. Not to mention it is the world's largest creditor nation.
What can be deemed a crisis from a western perspective garnered from a western understanding of parameters and benchmarks that determine such a crisis to occur, may not actually be the case for Japan. Not to mention Japan doesn't have the luxury of a popular government to enforce any kind of change anyway.
Japan doesn't have triple digit inflation like turkey did. Istanbul is more expensive than western European capitals now
@@verushistorie17 trillion??? What a joke. Japan never had this amount of money, even at their peak. Stop spitting LDP propaganda and just acknowledge that Japan is little by little destroying itself. The economy is now the 4th, most domestic companies don't want to convert their dollars for yen and the government doesn't want to do anything.
@@verushistorie17 trillion??? What a joke. Japan never had this amount of money, even at their peak. Stop spitting LDP propaganda and just acknowledge that Japan is little by little destroying itself. The economy is now the 4th, most domestic companies don't want to convert their dollars for yen and the government doesn't want to do anything.
I mean, my medical and utility bills here in Hokkaido are less than half for what I paid in America just a few months ago.
Well, everybody knows that US medical bills are legendary! It's more about the products you buy, especially tech, tech prices have definitely gone up by tens of thousands of yen.
Check the prices at Uniqlo since they are usually pegged to the US dollar not the yen.
Japan's economy is now good though.
Japan has many export companies, so sales and stock prices are at record highs due to the weak yen.
Frankly, I think this will last another 20 years. A systemic transition cannot be implemented until after a generation of strong and successful systematization.
For now, Japan is entering the beginning of the end of Japan's unique employment system of lifetime employment and seniority, but it will take time before the next new system or practice is built.
2:15 The US only sees you as a friend if you're helpfull and deppendent.😂
Dodge line comin in to save the day again lol
Yeah, it does make you wonder if the US is going in hard on China because they see them as a threat to its own power around the world, a bit like they did with Japan in the past, which is probably why others like Europe and much of the world don't listen as much when it comes to policies on China, in other words, they have concerns on China, but nothing to the degree the US has got, probably because China is by far a bigger threat to the US.
You also get a sense that if the EU were to integrate a lot more, the US would see them as a threat in the same way they saw Japan and see China today, it's about power, not the policies or the political system they live under.
I suspect because of the way the world is reshaping, China will likely continue to grow, the EU will eventually get its act together, the US will likely become more hostile to many of these powers, the US is a friend to the Europeans to a degree, but only to a certain level, hence why Europeans need to wake up and do what's in there interest, not US interest, because the US rarely cares about the interest of the rest of the world unless they stand to gain from it, Japan found that out in the 80's.
But it's not how all powerful countries behave? People generally are only as nice as they have to be. Same goes for all countries
They explained that situation really badly, the main issue was the rampant patent theft that Japan's tech conglomerates were engaging in, while their government helped them avoid any consequences. Similar to what China does nowadays.
You have to remember that that even up into the 80s, the pacific front of WW2 hadn't really left the American psyche. Some level of anxiety, after that experience, seems quite natural.
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If it (monetary policy) doesn't hurt, it doesn't work.
This video was incredibly helpful. Thanks.
I'm not an expert but I would suggest that Japanese economy mostly follows the population trends in the country. Japanese population has actually been shrinking every year since 2007 and even before it started shrinking it started to stagnate around 1990. Besides getting smaller, Japanese population is also getting significantly older. I believe the projection is that by 2050 over a quarter of Japanese will be 65 years old or older. Thinking about it that way, the fact that the Japanese economy can still post growth most years despite a smaller and smaller and older and older population is actually quite a good performance.
I am guessing that soon Japan's population might bounce back, when things get cheaper cause there is no Immigration, so things like housing will become very cheap even in places like Tokyo.
@@pranaav2027 but the cultural problems behind the low-birthrate doesn't seem to have changed, at least not yet. Not everything is economics.
So...the tide is receding for now.
similarly the main reason US GDP keeps growing is immigration-fueled population growth. take that out and we'd have stagnant growth too. explains why both parties want mass immigration......it's a ponzi scheme
The number of comment just saying "plaza accords", without doing a single bit of research into why those accords were implemented is hilarious.
US was losing that's why
100 million 5 Trillion economy
Vs
250 million 6 Trillion economy
The government racks up insane debt and now can't afford to raise interest rates to normal rates that would incentivize people to save and invest and build for the future
"ringing the bell" 😵💫
You just described Canada's economy in this video. i didn't realize we were so similar to Japan.
imagine being argentinian and not being mentally prepared for that burn within 3 secs
So Japan is in a catch 22? Only, you can't raise interest rates , for the cost of servicing debt is untenable. Just, the UK and most other so-called developed countries are also in this position, and especially the USA. My point, imagine having to print a trillion dollars of annual debt interest for the foreseeable future , wtf!?😮
TLDW;
Not sure if yen declining is a financial crisis though. I personally think JPY has always been overpriced until the correction finally happened/is happening. For example people who barely made their ends meet all had several overseas trips in their life. Imported tomatoes, bananas and oranges even from the USA are cheaper than home-grown ones. May be Japanese residents will be happy about this in the long term.
It’s been reported that Nintendo has some really huge cash reserves. Maybe it’s for the day the yen bounces back up, as then they’ll have lots of capital to maybe invest big again.
I am a Japanese student who will go to US grad school in July.
A weak Yen has negative effects on those who study abroad, such as the rising cost of living and tuition there...
You should get an American job while living there, then you can be well off when you go back to Japan.
@@falco830yeah that’s against the law
time to do some trading
Japan should start improving quality of their anime and manga and start exporting them to other countries that is the only thing which can save their economy
How about a jalonizuuuu maze..?
another western channel, skipping over the VERY IMPORTANT "Plaza Accords" that the US basically forced on Japan and its currency.
History is too difficult for this channel audience.
😂😅@@doc0core
Plaza Accords - I've heard of them. Perhaps you can elaborate and explain how that affects the current economic situation.
Eh, not really. Plaza Accords did what exactly? Depreciate USD relative to JPY, FRC, and DM. The idea was to increase American export competitiveness and reduce the trade deficit the US had with the rest of the free world.
Exporting economies tend to see their currency strengthen, and this can also be the downfall of their own export competitiveness. Hence why the rest of the Free World was willing to cooperate with macroeconomic interventions to reverse the trade deficit. With Europe, this was successful.
This failed to reduce US trade deficit with Japan, which only strengthened the Yen further. Unfortunately the Japanese reaction to the strengthening yen (bad news for a major exporting economy) is what led to the lost decade.
Japan was in between a rock and a hard place. Being the king of industrial exports brought them money bags, but also strengthened the Yen and risks making their exports uncompetitive. The solution to this problem (in hindsight) would've been to sell shit ton of JPY for USD and other currency (like what China did, since the Lost Decade essentially served as a warning for China). Instead, Japan didn't had hindsight working in their favor. They basically had the same thing that happened in America in 2008 with real estate due to a policy of "window guidance", which effectively created target quotas for mortgages, essentially encouraging subpar mortgages. The second double whammy was the decision to raise interest rate on inter-bank loans just as the subprime mortgage bubble bursted, which basically bankrupted Japanese banks and turned them into zombie banks. This trapped Japan in a balance sheet recession for the next 3 decades.
Contrast this with West Germany, where none of this expansionary policy took place. Germany, too, is a major industrial exporter. Yet, no lost 3 decades. Germany's self inflicted woes are largely attributed to piss poor energy policy.
And the line was supposed to go up eternally right?
And the relation between the US 'containing Japan' and its bubble bursting? Aren't you missing out a rather important part of the story?
The plaza accord....
western channels never talk about the forced plaza accords, that was obviously aimed at japan and its currency
@@inquisitive8903 japan changing their import controls was a bigger cause
This channel reports Anglo-centric perspectives only, nothing to see here. If you want a global perspective you'll need to seek content elsewhere.
I got muh tinfoil hat on too uncle Titus!
Wonderful!! I would listen to the female presentator whatever she will present. I love her voice and manner.
Thank you for lightening up my life.
Brilliant analysis
This is simply the most brilliant video. I have seen on the subject of Japanese economy in particular, but economy in general. It’s absolutely on another level in terms of quality. It is this, which is the future journalism you beat the economist hollow
Funny how you didn't mention plaza accord US destroying japan economy otherwise they would have over taken US gdp
Right!
Great point!
Funded by English people. Five eye countries
Yes and no. It didn't help, but it wasn't the sole reason.
@@Anonymous-hp1tgFrance and Germany were also party to the Plaza Accords, and are neither English speakers or Five Eyes members.
The plaza accord isn't the sole reason, Japan's economy would still be expected to struggle even without it
The term is “Quantitative Easing” not “Quantitive Easing” 4:29
I got paid more in 1991 in Japan than I would if I did the same job now in Japan.
That's quantitative* easing.
Why do western channels always gloss over the Plaza Accords. America MADE Japan strengthen its currency against the dollar, which led to speculation, which led to the 80s/90s bubble.
The Plaza Accords were signed to end the special benefits that Japan got to rebuild their economy post WWII. Removing the peg and allowing the currency to actually move in value relative to the Dollar is perfectly reasonable when Japan was taking advantage of the policy to export luxury goods at extremely favorable rates and creating a massive trade deficit that shouldn't ordinarily exist.
And what killed growth in the economy after was the Bank of Japan's absurd mismanagement of the Japanese Housing Bubble, not the Plaza Accords. This Bubble likely would have happened regardless of US trade policy, and was exacerbated by a bunch of junk investment loans being given out (and then these loans being cut off all at once for the crash). The same Bubble occured in both South Korea and China (with the Chinese Bubble still ongoing technically), and appears to be a result of Cultural preference to rest investments into property rather than Stock or other Investment vehicles.
@@BulborbPlays Kind of curious but is investing in property really that bad for the economy? Isn't it reasonable for people to invest in their property for the future due to the fact that land only increases in value over time?
@@bilboborbins The short answer is: There is nothing wrong with property investment, as long as those prices remain based in reality rather than speculation.
The issue that all 3 of the Asian Property/Asset Bubbles had were that long lines of credit were being taken out to finance property price purchases that couldn't be realized (since selling them eventually became impossible at the inflated price.) In Japan's case, the moment that the inflated investment loans started being corralled in, the inflated property and assets couldn't be flipped for a profit anymore by investors. This caused the speculative value of these assets to collapse, leaving individuals so horribly in debt relative to wealth that it is impossible to recover in a practical fashion.
Now, it is technically possible to overcome this. In the 06-07' property crisis in the US, junk loans caused a similar wealth/debt ratios that became massive liabilities to banks, which dried up investment loans. The solutions was Quantitative Easing, though unlike Japan the damage was small enough (proportionate to the US Economy) that it could be fixed with reasonable amounts of QE proportional to GDP.
The issue if you can't fix this is now you have investors that either cannot afford to do risky investments again, or will be so cautious with their wealth that they refuse to invest at all, stockpiling wealth into bank accounts or other low-risk holding areas. The US also saw this effect, and is why the 08' stimulus from the Bush administration wasn't enough to return investor behavior to a healthier state, and required the '09 and '10 stimulus packages to get investors back to relative normal.
TLDR: Property/Asset Investment isn't bad, but when investment value becomes detached to the real value of an asset, any disruption will cause the speculative price to align more to real price and destroy the wealth of the investor. When an entire society does this, the resulting destruction of wealth can cause massive long-term damage to all investments as all investors become less likely to invest.
@@bilboborbins Investing in property is perfectly fine, but when speculation makes the value of land diverge from its actual value, then it can cause some economic issues.
Hence why specifically for Japan, the investment loan market caused prices to balloon unrealistically for a while... until the loans ended and it all crashed down at once. After that happens big investors tend to get spooked and stick with low risk investments, and small investors begin to save because they lost all their money. In both cases, growth was hurt because suddenly the extra money needed to grow companies dried up.
@@bilboborbins Investing in property is bad when it's the only thing getting investment. Real estate doesn't stimulate the economy like industry does.
If you are considering traveling to Japan in the future, now’s the time to buy up Yen and save for later.
Around the last quarter of the last century each content of the secondary industries of Japan hardly existed in other countries with exeption of some Western countries such as the US, (West) Germany and so on. But today such industries exist in many other countries.
That must be part of the reason.
I'm just wondering why the Japanese government didn't just print money to create inflation instead of taking on debt? Seems like a better long-term solution since you'll always have the room for debt later down the road if you need to tap into that instead of printing. I'm sure with any kind of planning you could print a specific amount of money to achieve a specific amount of inflation.
Great video in general, but there is some economic misconceptions, which journalists always does cause they follow the common sense about things that they don't know.
Isn't it spelled "quantitative" easing? You spelled (and pronounced it) "quantitiive" at about 4:27
You are correct, it is Quantitative Easing. Quantitive is not a word in the English language.
with cc subtitle will be better.
lower yen = cheaper vacation to japan
Ironic how this video comes out a day after it was announced that Japan's inflation has hit record lows, productivity has gone up, salaries have gone up, GDP growth has increased more than in the past two decades... Japan is not collapsing, Japan just keeps going as it always has.
Don't know where you get your news. From what I've read its better than expected (which was God awful), but that was for the previous quarter.
Doesn't feel like that here! (Saitama, Japan)
Correct, but Japan has been miserable for decades. Inflation has gone up more than anything else, everyone is depressed from the economy, and I believe that even if the economy was good (which it isn't---you can't when your currency collapses by over 25% in a few months)....the Japanese wouldn't know it....they are conditioned to misery.
@@doctordetroit4339 The average Japanese person just pays no interest in these things. They complain when their favourite thing gets more expensive but we can still eat well for $3 and rent/houses are cheap.
It's amazing how many people don't care.
Uh... this video isn't about literally any of those metrics. It's explaining *only* why the value of the yen is collapsing. That's all.
If Japan’s economy is considered “collapsing” then what does that make my country 😭🇧🇷 we must have collapsed to the depths of hell at this point
The economy has to be built up to a certain level before it can collapse. A skyscraper can collapse, a piece of empty yard can't. And unfortunately the latter is the situation of most of the economy in the world...
Bro Brazil is a joke in everywhere for a reason, from Saudi to Japan to Netherlands. I have only seen Americans take Brazil seriously and I assume it was only because they were open-minded and that stuff
Brazil will collapse in 12 seconds! Or so the online media wants you to belive.
This pretty much sounds like the same problem America is dealing with, it’s just not as far advanced in America yet. 35 trillion in debt, need to cut rates but they can’t bc inflation isn’t under control. Basically waiting for a wheel to fall off (stock market crash, sudden job losses, etc.) to then be forced to “cut” rates while not dealing with a single real problem causing it.
That's what happens when there is no natural resource to tap into. A trade-only economy doesn't work even in strategy games.
The ramification of the Plaza Accord is alive and well.
What was the plaza accord?
@@phantomgaming563 it's an agreement between the G-5 to devalue the US dollar
@@phantomgaming563 It allowed companies to build Glass buildings
@@phantomgaming563 Not so easy to explain. Basically, the US forced Japan to appreciate yen. Google would give more in-depth info.
@@John-.-SmithSo basically,The US is responsible for japan's economic crises.
The Bank of Japan has kept its interest rate pegged to negative for years now. However, the fact that the Yen depreciated so much really galvanized the BoJ into actions. Hence, it had to rachet up the interest rate to 1.0% 😂😂😂. If you compare the usd/yen exchange rate in 2011 to now, it has shockingly doubled.
0.1 ???
Its 0.1% smart pants. If BoJ raises its interest rates as the same like other countries did, ¥ will raise its value significantly.
Economists generally have no idea how to explain a lot of these "economic" behaviors either, because they are simply too complex and easily manipulated. Economic measurements are samples of slices of a much much bigger pie, and a lot of countries manipulate that data to either make certain things look better or worse. And it works, because economy is ultimate how people value things, and that says nothing about how much value you can place on something. Bubbles exist just as much as under-value. When a economy is heavy trade dependent, unless a model can factor in other countries economy data, then it is just considering the reactionary moves of a country instead of on going impacts aka future predictions, which are what models are meant to do.
They make the best kitchen knives in the world though I have to say.
Japan and South Korea are conglomerate run oligopolies, Japan is just finally seeing the long term downsides of that choice.
Japan actually is much more diversified and has lots of medium/small businesses.
The problem is the Bank of Japans ultra easy policy. Their interest rate is ridiculously low
lol That's still way better than my own country who never even experienced an upside XD
@@ciello___8307 Small business exists, but it's been boxed out of tech and heavy industry, which is disproportionately represented in Japan's exports
@@kendelionWhat? Aren't you japanese?
@@todo9633 I'm an immigrant here :)
Japan's economy is always in crisis yet Japan's economy is one of the strongest and biggest.
Same with the German economy.
Endless videos about how the German economy is heading for disaster and yet it is the third largest economy in the world and people around the world would love to be as well off as people in Germany.
Japan and Germany seem to be doing pretty well for places with economies that are reportedly in a terrible situation.
Yeah its the buzzwords trend on any economic video or article. But Japan economy has been stagnant for a while.
@@geofflepper3207 I think the reason is that people simply have higher expectation and care more about these successful economy because of investments and economic ties. If Euro devalues 10% overnight, markets around the world will freakout. If Zimbabwe dollar went down 10%, well nobody is gonna even notice
Or it can engage in national debt cancellation in yen. It has an international surplus. It can perfectly reset its own accounting books.
When inflation has gone berserk, and the media call it "verify high standard of living".
Something in the Japanese economic system has to give in.
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Japan will be able to use foreign reserves to stabilize their currency indefinitely because the longer US interest rates remain elevated, the greater the supply of dollars Japan will receive as Americas largest foreign bond holders
Why doesn't Japan have very high domestic inflation with the heavy devaluation??
Because they don’t culturally tolerate corporate price gouging.
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The other thing most Western people do not understand - house prices go down the older and more used the house is - living in a house greatly reduces its value over time - due to this and the demographics of Japan it is possible to buy a worthless house for the price of the paper work to transfer ownership - but have fun renovating it and esp disposing of materials as you do upgrades and other things to it - thus increasing and decreasing interest rates are not that effective
How is this different from the West?
You can get houses for free even in Japan, however the main problem is that the places where these free or very cheap houses are located aren't exactly the places offering great job opportunities. That's a far bigger issue than the renovation costs. It's nigh economical suicide for Japanese people or foreigners to move into these houses if they still need to work and the people who don't require a job either constitute a large part of the population of the places with these houses already (retirees) or don't tend to want to live there, (rich foreigners, rich Japanese)
@@mr.netflix9149 Land is an appreciating asset in the West.
@@mr.netflix9149 the western world (and many, many other countries outside of the west) has a continous housing bubble that bursts every couple of years but inflates itself, wherein housing and land cannot really depreciate
You don't want to buy an old house in Japan.....you just don't.
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
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Forget the lost decades from the stock market. The biggest crisis is the aging population and shrinking of economy due to less working force. That would reduce the price of real estate though since the same will be available for less people.
4:21 HOW DARE YOU MISSPELL QUANTITATIVE! 😡😡
Japanese Yen were propped up by USA dollars allied in Plaza Accord in the 70's to keep American products more competitive and makes Japanese products more expensive. This is how USA treated their friends.
No, The Japanese kept their currency undervalued and restricted imports....the jig was up.
They should invest most in tidal energy harvest and vertical farming, to reduce import levels.
Sadly even tho it's very interesting and high tech vertical farming not worth it right now economically. I read news and saw videos talking about they are not performing well in this economy right now.
tidal energy is expensive and uncertain and is environment based
I would assume the reason they import so much stuff is that Japan is a more developed country surrounded by less developed countries so the labour costs are cheaper over seas meaning it was cheaper to import. So I guess vertical farming may only work if it's also using automation to make it cheaper than foreign labour.
@@RF1702 The problem with vertical farms is, the biggest cost not even the equipments or the electricity, but the people. You need highly educated people there.
@@ms.carriage6867 Tidal energy is cheap but you need a certain type of coastline, I don't know enough about Japan's coast to say if that is suitable. Geothermal would probably be a better option, Japan is full of hot springs which could be used to produce cheap power
Well, as far as all the tourist from english countries keep going to Japan. It should be good.
It’s the entire world now. And the horny men only go for the woman, since that’s the most sought after export
Well it’s the whole world now. Men go there only for the woman, since it’s japans most sought after export.
@@mikloridden8276what???
@@AnavonRebeur Exactly as I said. Japanese woman are the most wanted among men around the world and thanks to the adult industry those guys head over there looking for it. The industry is big on this. More recently Japanese workers have been going abroad as escorts as they are in demand in different countries.
@@AnavonRebeuranime has fetishized Japanese women, now every guy wants a Japanese wife
3rd option, sell US bonds and buy yen if US allow.
Listening to this you would think the country is a catastrophe but when you go there you think they are living in the future. How does that work?
The foreign exchange rate is purely for the low interest rate in Japan and high interest rate in US, plus the prospect that FRB isn't going to lower the interest rate anytime soon and the central bank of Japan isn't going to rise it either.
Did Japan's economy "experience a financial crisis" or did Japan's economy get destroyed by the Plaza accord?
Japan has been playing this unsustainable game for 2 decades. The game will end sooner or later.
so we all can go to Japan and enjoy ;) jokes aside I loved the country and I wish the very best for them.
1 view in 34 seconds, bro fell off
Nah you.
🫸🧍♂️
The problem is Japan believes it is a western country and aligns itself with the west. BUT West treats Japan for what it is, just a highly developed eastern country. It's never an equal partner economic wise. 😊.
If the BoJ buy the yen with its massive foreign currency, maybe it can average the 145 again. That would favor exchange with the yen again
BoJ is not allowed to sell US dollars right now and with high interest on dollars yen is doomed
@@vtar2523 It is allowed. It already started doing so. If not dollar, other currency
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This is actually good for Japan as the low yen means that exports will become more attractive to overseas buyers and will strengten their trade imbalance.
Well in this case it doesnt work in that way cu their import rate is too high and low yen makes import cost big.
USA the Tonya Harding of the economic world...😅.....
Great explanation 👍. It had been quoted many times “Japan’s economy is as a fly looking for a windscreen”. Wonder if there could be more flies in the future considering the cheap money policy past decade’s 🤔
quantative easing is a one way road to killing your currency.......Zimbabwe is a prime example of crazy money printing
The US isn't far behind
@@doctordetroit4339still everyone uses USD for international trade... I'm not American, but they did something cunning.
For the love of God Japan do not open that border. Artificially inflated growth rates are not worth the utter destruction wrought upon us in Europe.
Uhm based?
Does "Plaza Accords" ring a bell? This lop-sided accord basically handcuffed the Japanese.
I liked that one comment I saw of Japan reaching a mature economy. Then going into a decaying company