※Translated with Notion AI. (Plus version)
This is a corner to answer questions about economics that have arrived at the contributor Snow White of SEREN.
This time, we will answer many questions that have arrived about the article “Super yen depreciation” speculation amplifies.
Theoretical value is 142 yen, difficult to explain with interest rate difference”
(https://www.nikkei.com/article/DGXZQOUB294YS0Z20C24A3000000/)
We have received many questions about this article, so we will answer them (we have edited and posted questions received from multiple people).
Question 1: I don’t understand the Nikkei newspaper’s article on “super yen depreciation”. Is it too advanced? I don’t understand no matter how many times I read it.
Answer: It’s OK if you don’t understand. The claim itself that “changes in money flows around the yen and the increase in price movements by speculators make it difficult to explain with the theoretical value” is nonsense.
Even if there were something called a “theoretical value”, if the money flow is changing and affecting the exchange rate, you should think about what the theoretical value would be after considering that.
Reality comes first, and theory is merely a means to explain it. It is fruitless to arbitrarily determine a theoretical value and criticize that it is not being realized due to speculation.
What is the point of a “theoretical value” that doesn’t hit?
Question 2: If there is a theoretical value, why did speculators like hedge funds trigger a yen sell-off?
