The Japanese yen's sharp decline against the U.S. dollar is primarily due to the market's ongoing sell-off amid a wide interest rate differential between Japan and the United States, according to Toshihiro Nagahama, chief economist at Japan's Dai-ichi Life Research Institute.
In an interview with China Central Television (CCTV) in Tokyo on Thursday, he said this is an outcome of the U.S. Federal Reserve's decision to keep interest rates unchanged and postpone the anticipated rate cut.
The Japanese yen dropped further to a fresh 37-year low against the U.S. dollar on Friday, crossing the 161 line for the first time since December 1986.
"The utmost cause is with the U.S. side, with the U.S.' decision to delay the anticipated interest rate cut," Nagahama said.
He held that the depreciation of the Japanese yen brings benefits to Japan's export enterprises, but the consequent price rise of import gives much pressure on many small and medium-sized businesses.
"The profits in global market could increase for international enterprises as they could make profits from it. But for enterprises focusing on domestic market, especially small and medium-sized enterprises heavily dependent on domestic demand, they face a higher cost burden with the rise of import prices," Nagahama said.
He said that the Japanese government is likely to await the release of inflation-related data from the U.S. before contemplating any intervention.
"The decision not to conduct the market intervention now is because the U.S. side will not release the crucial inflation-related indicators until this weekend. If the data exceed market expectations, with appreciation of the U.S. dollar and continuous depreciation of the Japanese yen, then to conduct foreign exchange interventions at this juncture would be more effective," Nagahama said.
Japanese expert on sharp yen falls
A cross-sea highway project linking the cities of Shenzhen and Zhongshan in south China's Guangdong Province went into trial operation on Sunday, set to further improve the transportation network in the Guangdong-Hong Kong-Macao Greater Bay Area city cluster. With a total length of 24 kilometers, the Shenzhen-Zhongshan Link consists of one underwater tunnel, two bridges and two artificial islands, crossing several main waterways of the Lingdingyang Bay.
The highway shortens the travel time between Shenzhen and Zhongshan from two hours to 30 minutes.
The link is connected to several major expressways such as the Guangzhou-Shenzhen Riverside Expressway, the Jihe Expressway, and the Guangzhou-Shenzhen Expressway in the east, and the Zhongshan-Kaiping Expressway, the Guangzhou-Macao Expressway, and the Zhongshan Eastern Outer Ring Expressway in the west.
It also interfaces with the Nansha-Zhongshan Expressway (currently under construction) and the Nansha Harbor Expressway. The east end of the link is less than 10 minutes' drive from the Shenzhen Bao'an International Airport.
The link will charge a toll fee of 66 yuan (about 9 U.S. dollars) per standard vehicle for the entire 24 kilometer-long route.
It will further expand the one-hour life cycle in the Greater Bay Area. By way of the Shenzhen-Zhongshan Link, the travel time from Shenzhen to Nansha District of Guangzhou City can be shortened to half an hour, and that from Shenzhen to Zhuhai and Jiangmen cities reduced to about one hour.
In an interview with China Central Television before the Shenzhen-Zhongshan Link opened to traffic, a Hong Kong resident expressed his anticipation for the highway's operation, saying the link will allow him to have breakfast at his home in Zhongshan, travel to Shenzhen for business talks in the afternoon, and then go to Hong Kong to admire the beautiful night views of Victoria Harbor.
Cross-sea highway linking Shenzhen, Zhongshan goes into trial operation
