Why the Japanese Yen is Collapsing

Japan has been living in the year 2000 since the 1980s

“Developed, undeveloped, Argentina, and Japan” Quote of the day

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.

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 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.

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.

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.

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!

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

2:38 "The bubble burst, and continued to burst for a while" I don't know why that caught me off guard

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.

Nice to hear a beautiful, eloquent and sophisticated sounding SRP (standard received pronunciation)--very classy.

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.

The quest for infinite growth on a planet with finite ressources. What could go wrong?

The yen dropping is hurting us SO BAD... seriously. Imports are basically impossible, gasoline prices, although kept at a reasonable value, are 40% higher than they were before the pandemic, and all food has gone up in price 15 to 45%, and add to that massive amounts of shrinkflation (sometimes the amount of food per price has dropped by 40% too) and skimflation (worse quality of products). It's getting ridiculous. They make things smaller and of worse quality so that people don't get scared of increasing prices, but people aren't stupid and buy less because they notice the prices actually increasing all over, so they buy less. I have had to stop buying half of the stuff I would easily buy before the pandemic because they feel like a luxury now. People are eating less and worse. Not saying it's starvation levels, but I imagine if people in the lower part of the income spectrum are actually low-key starving or not (and yes, there is poverty in Japan, there has been a lot of it for like 20 years or so; privatizing all access to schools and colleges, and the postal system hurt the pockets of vast swathes of the population, condemning poor people to cross-generational poverty: kids of poor people could, if they worked hard, get proper education before, but it's much, much worse and harder now. Japan did not have a higher and lower class before 2004, but now it does). I don't give a rat's ass how much Nissan or Toyota or whatever are making selling cars abroad: that income does NOT trickle down the rest of society. Trickle-down economics are a scam and it's been known for decades. Reaganomics are a scam. Abenomics (rest in peace) are a scam. And tourism money, well, I'm happy that people who could not come to Japan during the pandemic are being able to come and visit the nation and dropping money, alright, but Japan needs to find a way to monetize that and to keep antisocial tourists out, because there are always a few bad apples that give the rest a bad name.

Hey, I want to start investing but don't know where to begin. Any advice or contacts for help?

YT Quick Survey: For your shared investing ideas, what do you think will be the next Apple/Microsoft in terms of growth?

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.

“Understanding these kind of economic theories are difficult, and honestly even politicians don’t seem to understand them” That has to be the most diplomatic phrasing of politician’s capabilities I have ever heard. I wouldn’t trust them to know which way to turn a screwdriver.

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.