Yen and weak yuan compared to the US dollar… The won can be encouraged to fall

While the US dollar is strong compared to the Japanese yen and China’s yuan, it has been observed that the weakening of yen and yuan can further reduce the value of Asian countries.

According to Bloomberg on the 25th (local time), the Japanese yen value has recently fallen to 145 yen, and China’s yuan has fallen to 90% compared to September 2018. This is because the US Federal Reserve and the Monetary Policy of the Fed and the Central Bank of Japan and China are in the opposite direction.

The problem is that the decline in the value of the Japanese yen and Chinese yuan does not end with the two countries’ problems. Japan is a major credit export country for Asian countries, and China is the largest trade station in Southeast Asian countries for 13 consecutive years.

Mizuki Bank Bankyuvaratan, head of economic strategy, argued that the weakness of yen and yuan is related to Asian trade and investment, and if the weakness is intensified, it can be a financial crisis in Asia.


Singapore DBS Group Timur Big, chief economist, said, Asian countries are all exporting countries, he said. 1997 or 1998 can be reproduced.

In other words, due to the drop in currency value in Japan and China, overseas investment funds are not leaked off.

In terms of high correlation between the yen and the MSCI emerging economy index, the weak yen will have a big impact on Asian countries, the market officials are analyzing. According to the analysis of the BNY Melon Investment Management, the yuan accounts for more than a quarter of the Asian currency index weight. The 120-day correlation between the yen and the MSCI emerging economy index jumped to more than 0.9 last week after being reversed until April.

Goldman Sachs Jim O’Neill, chief economist, predicts that if the yen drops to 150 yen, it can lead to the 1997 Asian financial crisis.

However, it is analyzed that the Asian countries and the current Asian countries were exposed to the dollar borrowing in the 1997 financial crisis.

However, Hong Kong’s Macquarie Capital Trans toy Strategist, The most vulnerable currency is the current account deficit currency such as Won, Philippines Peso, and Thailand Baht. It can continue.

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