Lowest in 38 years! The yen fell below the 160 mark, what are the risks of investors hoarding yen?

Bagel Finance

2024-07-01 09:00The official account of China Business News "Bagel Finance".

On June 26, according to Japan's Kyodo News Agency, the yen exchange rate plummeted, falling directly below the 160 mark, and even fell to 160.65 yen per dollar at one point, setting a new record since December 1986 and falling to a 38-year low.

The yen has been diving all the way, and it is really cheap for tourists from all over the world. Taking Louis Vuitton as an example, the price of the medium-sized Carryall bag is 21,500 yuan in Chinese mainland, 2,250 euros in France and 396,000 yen (about 17,444 yuan and 18,415 yuan) in Japan. But if you add in the tax refund rate of about 10% for Japanese tourists, the price of this handbag in Japan is about 16,569 yuan.

Louis Vuitton's parent company, LVMH Group, pointed out in its financial report that the growth of the Japanese market is due to the impact of price increases in the context of currency depreciation on the one hand, and a large number of tourists visiting Japan to buy luxury goods because of the widening price difference.

In addition to buying, buying, and buying, many investors are eyeing hoarding yen as financial management. Some posts on social platforms sharing the experience of "hoarding yen" have also attracted a lot of attention.

Is it really possible to make money hoarding yen? Can the yen buy the bottom? It should be noted that the purchase of foreign exchange at the bank is divided into the spot exchange purchase price and the spot exchange selling price, and the price reference is different when buying and selling. The exchange rate of each bank is not exactly the same for foreign exchange settlement and sales. In addition, in the long run, the yen is currently in a relatively safe position, and short-term fluctuations are mainly affected by the flow of funds, and it is difficult for ordinary investors to track the flow of funds in a timely manner.

From the perspective of speculating on the yen, there are two main risks:

First, the risk of exchange rate fluctuations:

Fluctuations in the exchange rate of the Japanese yen may lead to uncertainty about investment returns. The yen exchange rate is affected by a variety of factors, such as the state of the Japanese economy, global market dynamics, and the monetary policies of other countries. The Japanese government or central bank may intervene in the market to stabilize the yen exchange rate. Such an intervention may cause the yen exchange rate to fluctuate significantly in a short period of time.

The second is interest rate risk:

If interest rates rise in other countries, especially the United States, and Japan maintains a low interest rate policy, investing in the yen may become unattractive, leading to a depreciation of the yen. At the same time, the opportunity cost of holding the yen is higher in a low-interest rate environment, especially relative to high-interest currencies.

Tan Yaling, president of the China Foreign Exchange Investment Research Institute, said that investing in the yen is more complicated, and from what she has observed and learned about foreign exchange, there are more people who lose money in yen than those who make money. Japan's monetary policy is more affected by external factors, and the relationship between the yen and the renminbi is more complicated. Because the yen depends on the relationship with the dollar, and the yuan depends on the logic with the dollar. At present, the yen is depreciating extremely, and the renminbi is also depreciating against the dollar, so there is great uncertainty about whether the renminbi will appreciate or depreciate against the yen in the future.

Investors should establish a long-term and stable investment concept, and avoid excessive pursuit of short-term hot spots and high-risk investments. In the face of emerging investment phenomena such as "yen hoarding", you should remain calm and make rational investment decisions based on your own financial situation, risk appetite and investment goals.

View original image 389K

• 

• 

• 

• 

•