[JPYKRW] Forex Analysis - 2022 Q2

<This post will be updated till the end of June, 2022>

 

[17th June, 2022]

Japanese Yen literally freefalls itself. This is obviously due to some hike by the US interest rate. For now, no one knows how our new variable element: monkeypox would shake the world.

 

Let's see how it works. At least it is quite obvious the Yen will not look up the higher level, for now.

 

[8th May, 2022]

Japan's PM speculated: they may lift the travel ban by June, 2022. Date is not confirmed and they will see how the golden week responds to the covid infection rate. This can burden off the current low yen issue economically.

 

Then what about Japan's economic stance?

 

FX market in Japan will welcome it anyway. This will carry up the low yen issue to hold it and keep sustaining the current minus cash rate policy as well. If that so, the travel ben will definitely be lifted by June sometime. 

 

The only question is; the Chinese tourist and other developing places. What if one of them carries Delta variant to Japan again? If Japan continues the current vaccination and medicine for patient, that should be fine. And the potential threat would be what if another type of new covid like virus assualt here? They blocked their nation for years and that may cause all around the globe to come at once.

 

Highly likely. Though they only accept a person who got vaccinated 3rd times, no one knows how it affects potentially in long-term. If you are thinking about this in long-term investment, it would be not bad to keep this point in mind. Let's not forget. The hot weather and dirty environment are such a great condition for virus to morph another threat to mankind. And climate change will bring a huge no no this Summer as well. Obviously strong one than last time due to the sea temperature.

 

[3rd May, 2022]

South Korea eased the mask mandatory rule since yesterday. Yes, they eased and that means covid pandemic is not over yet. And do remember when such a viral virus occurred. It was probably autumn to begin spreading as pandemic level, from mainland China.

 

And numerous people refuse to take fourth booster shot. This will act as a singularity - no one knows if new government leader wish to mandate mask wearing again when the moment comes sometime mid period of this year. Like how Japan did made a mistake, new Korean government is likely to follow its path.

 

And probably end of Q2 is the hitting point for the KOSPI. If they do not make any significant improvement after reclaiming the conservatism, it would be only a matter of time to see what you expect. Korea must presents that their economy has the ability to sustain the current growth rate - otherwise they may be at risk to be marked as the recession.

 

Anyway, Japan sent a signal to the upcoming government and president of South Korea.

Not sure what both side expects to build up the relations - yet both side have some expectation to see something.

Alternately, they are not excited at all.

 

Let's cautiously wait and watch for their first movement.

Japan foreign minister to attend Korean president’s swearing-in to thaw ties

 

 

[29th Apr, 2022]

The thing is obvious; Japan insists lowering the cash rate whilst US bank raises it to surpress the inflation.

 

Further, the Russia and Ukraine's war or conflict is another thing to take down JPY. 

And China will be the major threat to boost the current condition to be longer.

 

Yet, Japan has the best infrastructure in the industry. Their national market is still enough to roll the economy to function as usual. Their financial market; is worth and attractive than South Korea. Their tourism definitely attracts most people around the world.

 

Then when would JPY eventually stop depreciating itself? At least Japan is highly likely to open the border this year for the sake of their economy. But, there may be some political issue to do so.

 

The aftermath of Japanese PM and their party, and media

Remember Japan literally blocked the whole border once they detected covid-19 in Japan? As your nation may also suffers somewhat gaslighting condition in media, SNS; Japan used it strategically. Their media pushed the public to convince that foreign virus came in to Japan to foreigners are spreading the virus. This is like how Donald Trump feel cautious when he said to “But, I recommend: take the vaccines. I did it. It’s good. Take the vaccines.”

 

Japan's current vaccinated status is:

booster given is around 50%, and fully vaccinated by 80%.

If government of Japan think the public seems okay to accept the tourists, it may be good signal for recovery.

 

Yet there is some aftermath - raises of their living cost. Japan has to seek for alternative solution to face or flee. And now right moment, Korea's conservatve leader wants to build a positive gesture and media suggests to greet Mr. Yoon anyway. 

 

So, will JPY fall down further? Probably. Will JPY raises again? If they solve the current trading balance, and other resources to calm down their bill. Either way, both new and current leaders in Korea and Japan will face 'something'.

 

 

[24th Apr, 2022]

As US dollar gain some power due to raise of the cash rate, JPY price falls as expected. Yet, caution is advised. No one knows US will theoratically sustain its dollarasation for this year and this may cause some shock for people who buy at the present level. 

 

So far, there is no issue the BOJ ever consider raising the cash rate. Still, Japan has the very same economy issue as what South Korea has. To be precise, Korea follows Japan's economy model.

 

The question is; will JPY safely prove itself as a currency haven for this time? At least Japan has the toughest economy infrastructure than any other asian countries.

 

Let's see how they act in this Q2. For now, I do not think the Korean won per 1 yen to fall below 9.30 won. If this happens, then maybe we can expect some panic selling for awhile. This is just a personal thought with no evidence, so be cautious when you judge yourself. 

 

 

[7th Apr, 2022]

One thing is obvious; Korean won value has been depreciated. That's the answer to your question.

 

Since intellectual laziness boss will be in chair of South Korea, after 10th of May, It is obvious the fate of Korean economy will fall - if they do not perform better than the previous. Being nationalism gives very clear pros and cons - it can stimulate targeted industry in short-term period yet this will require some sacrifice, like how our body uses adrenalin in case of urgency. 

 

Meanwhile, American businesses increasingly adopts four day business work time policy for each week. This is obviously to increase the work performance efficiency.

 

[31st Mar, 2022]

Now some of you may wonder why it does not free fall than you expected.

Though Korea somewhat seem to achieve covid endemic condition...the following president after 10th May raises many unpopular policies and promises along his old people.

 

And I know who established this media - same old bullshit from conservative. They don't even change at all.

Let's see how their glorious conservatism can save the people. I just hope they don't give people any reason to stay in Korea since the system follows the same as how US and Japan does. 

[Kim Seong-kon] Ten propositions for Korea’s brighter future

The answer is quite obvious - the overseas media exactly set a right scope. Unlike Korean base media.

How South Korea’s Foreign Policy Could Change Under the New President

Just keep in mind - Korea scored 23.70 in 2020, which is 42th from RSF.

Let's see how it would change after this year.

 

The Korea's weird real estate price will not be stabilised that easily - as you expected. Yoon declared to ease many safety law for construction to let each old apartment can launch some remodelling plan - to raise its landing value. There seem to be some rumor the electricity and gas price will rise to reduce the debt of the nation.

 

After May 10th, I don't even want to concern whether low ~ middle class people are dying out or not.

This time, the upcoming poverty is definitely their choice. They chose to be fallen. They chose to raise and support rich and wealthy people, like high class group. 

The only people who is regretting now must be the only people who vote for this guy with no thought.

 

The next economy engine would be chipmaker, IT, science base sector only. Others are all meaningless under the conservative regime. Probably lots of people will hurt or die and media will soon be sanctioned by the upcoming government - just like how the conservative regime did.

 

What about Ahn? He refused to be the PM of Korea and returned to his place, as a head of his party.

 

So, that's pretty much I can spread the info I have gathered so far.

And please don't say that politics and society are not a part of Forex issue. Seriously.

---

[30th Mar, 2022]

Let me tell you my thought. 1 Yen = 9.70 Won may be the first barrier to resist this depreciation.

 

[Some speculation]

- Looks like Japanese real estate market heats up abnormally.

- the energy for domestic civilian seems abnormal due to Russia's energy sanction in globe.

Caution advised. No one know whether this is a signal of slump or revealing unknown box.

 

The only concern regarding Japanese economy is their higher debt rate and low inflation rate.

Other than that, they are obviously rich and stable enough compare to South Korea and China.

 

Their diplomatic strategy is to cooperate with USA. It is unclear whether they can form up some friendly route with South Korea - yet Japan still holds the card to use it in appropriate time, in their perspective. 

 

[22th Mar, 2022]

US Fed raised the cash rate. Literally declared to take the contractionary monetary policy whilst Japan maintain the current expansionary status. Due to this background actions taken by each nation, the Japanese yen may seem weaker against to USD. Just keep in mind, the Japanese cash rate is -0.1%.

 

[19th Mar, 2022]

Obviously, the Fed of America raised their interest rate and even forecasted to raise it further to surpress the high inflation and its loan issue. Then what about Bank of Japan(BOJ)? As people expected, they do not plan to adjust their monetary policy for now. So this sounds like the current downturn movement might be temporary situation - a phase to turn off the heat due to many ongoing uncertainty issues on globe. And just that moment, US Fed clicked that interest rate. 

 

Now the question would be - until when? When does this trend may stop and sustain or raise itself again? To state my opinion - now is probably the floor and should not go down further from the current level. Probably no further than JPYUSD $0.80. If this line collapses, then the situation might be temporarily out of control and the market may be in panic condition. One thing is sure; BOJ has no good reason to raise their interest so the only trend I can see now is either sustaining the current price or depreciates a little bit more from the current place.

 

Meanwhile, the global real estate market all recorded the highest price - looks like majority of Koreans refuse to understand the pandemic condition.

FOREX-Dollar rebounds as Fed officials comment on rates; dlr at 6-yr high vs yen

 

[18th Mar, 2022]

After winning the presidential election by conservative party, now the diplomatic relation in between Japan and Korea sounds chilling enough to solve this long-term historic dispute. Whatever the truth was, now majority of Koreans choose to be the conservative. Meanwhile, Japan's PM Kishida delivered the message to congrat Mr. Yoon but insisting their previous attitude with no change.

 

How it hits the domestic economy?

South Korean government (after May 2022, Yoon's regime) is likely to sustain the military forces with America and Japan, which is called JISOMIA. By declaring this action, Japan can demand to South Korea for sharing the military intel with their self defence forces. Have no clear idea what a purpose of Kishida's Jiminto party is; yet this may not be a pleasant deal for South Korea. At this rate, Japan loses nothing but gaining. Perhaps Korea may take no further action but cooperating with the American government.

 

JPY/KRW

JPY will reasonably valued in higher rate against to Korean won. Japan has no reason to make an advanced deal with South Korea, as of strategy to own a profitable position on this negotiation table. Yet, SK gov. might be not that thoughtless. In their view, they may ask them to increase the trade or enhance the economic reliance in both nation's market.

 

The question is; will Ukraine war possibly be summed up shortly? Still, Russian forces obviously attack Ukraine but market already expect the war is about to be done. No one knows how the situation would be - since mainland China is being the alley of Russian side. This may develops to another cold war, plus the energy war.

 

If energy crisis becomes true, then obviously the higher inflation issue would bring the stagflation to most developed country. Yes, Korea is not an exception. South Korea is likely to face no-growth at least for years. The nuclear plant may burden off the elec bill for citizens - yet the construction time will hold much longer till it takes to the effect. RE100 is likely to be a new burden for South Korea whilst enjoying the trade with Europe.

 

South Korea will be entering a new Asian version far-right wing conservative era - like the Trump government.

The demand to Korea is obvious - chip, clinic, probably science. The domestic economy factors are almost neglectable since even Yoon will not dare to touch The Big Firms in Korea. The traditional big firms will define the destine of this country. Yet, the citizen's life won't be that different compared to the previous pandemic era.

 

Highlight for a long-term viewer

Will Japan finally become innocent nation? What happen if Korean nationalists simply agree to forget about Japan's war crime issue during the occupation period? Can both nations make a peace eventually? Will both side citizens accept a consequence? Depending on its progression, Japan and Korea can be an irreversible partner or remain as a son of a bread.

 

<Disclaimer: the market changes every second and hence, the post you see now can be outdated information. You shall not fully rely on this post to make your decision to conduct any financial movement. I do not take any responsibility and this post shall be limited as an individual post on the blog.>