Tokyo, Japan - Recent

Storyline:
The financial policy adopted by the United States is a major factor leading to appreciation of the U.S. dollar and depreciation of the Japanese yen, said a Japanese economist in a recent interview with China Media Group (CMG).

Despite market forecasts showing that the Bank of Japan, the country's central bank, will revise its policy interest rate upwards, there is still a large gap with U.S. long-term interest rates.

Moreover, uncertainty about the timing of the Federal Reserve's interest cuts also plays a role in keeping the large spread between the Japanese yen and the U.S. dollar, according to Hideo Kumano, chief economist at the Dai-ichi Life Research Institute in Japan.

At the end of this month, Japan will hold a monetary policy meeting to decide whether to raise the policy interest rates, which is of great concern to the market.

Kumano said he believes that even if the central bank hikes interest rates, it is hard to reverse the yen's decline trend quickly, and that the excessive upward adjustment will even put more pressure on small and medium-sized enterprises to pay interest.

The persistent depreciation of the yen will lead to a sustained increase in the cost of imports, which will push up prices in Japan, bringing more pressure on small and medium-sized enterprises and people's lives, according to the economist.

Shotlist:
Tokyo, Japan - Recent:
FILE: Tokyo, Japan - Date Unknown
1. Japanese national flag;
2. Building of Bank of Japan;
3. Sign of Bank of Japan;
Tokyo, Japan - Recent
4. SOUNDBITE (Japanese) Hideo Kumano, chief economist, Dai-ichi Life Research Institute:
"People expects the Bank of Japan to raise its policy rate, but the policy rate itself is pretty low. Even with an interest rate hike, there is still a big gap between it and the higher U.S. interest rates. And this is the major cause of continued depreciation of the yen.";
FILE: Tokyo, Japan - Date Unknown
5. Various of Japanese yen banknotes on counter;
Tokyo, Japan - Recent
6. SOUNDBITE (Japanese) Hideo Kumano, chief economist, Dai-ichi Life Research Institute:
"Although the Fed is expected to cut interest rates sooner or later, the forecast delay in the interest cut will keep U.S. interest rate high, causing funds to flow from Japan to the U.S., e.g., by selling the yen to buy the dollar. So, the U.S. financial policy is an important cause of accelerating appreciation of the dollar and depreciation of the yen.";
FILE: Tokyo, Japan - June 16, 2022
7. Various of signs reading "Bank of Japan";
Tokyo, Japan - Recent
8. SOUNDBITE (Japanese) Hideo Kumano, chief economist, Dai-ichi Life Research Institute:
"The room for the Bank of Japan to raise its policy rate is limited, that is from 0.25 percent to 0.5 percent to 1 percent. And the further interest rate hikes will increase the burden on interest repayment by small and medium-sized enterprises. Only an increase in policy interest rates will not stop the yen from depreciating.";
FILE: Tokyo, Japan - April 2024
9. Various of pedestrians crossing street;
Tokyo, Japan - Recent
10. SOUNDBITE (Japanese) Hideo Kumano, chief economist, Dai-ichi Life Research Institute:
"If the yen continues to weaken, it will push up costs. Rising prices of all imported goods, including energy and food, will add to the upward pressure on prices in Japan.";
FILE: Tokyo, Japan - 2024
11. Aerial shots of cityscape, traffic.

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