Recently, in the Japanese Monetary Policy meeting held, the Bank of Japan (BOJ) decided to increase the overnight lending interest rate to 0.25% from about 0 - 0.1%. before. Governor Kazuo Ueda also expressed a more positive view on raising interest rates. In response, the yen rose to its highest level since mid-March.
The stock market changed negatively. A series of export-related stocks were sold off. The Tokyo stock index (TOPIX) fell more than 3% at the close. This is the deepest decrease since April 2020. Meanwhile, 2-year government bond yields jumped to their highest level since 2008 as interest rates inched up.
According to Mr. Kasumi Miyajima (Japanese Ministry of Economy), when short-term interest rates increase, interest rates on mortgages change, the number of borrowers is expected to increase. Loan interest rates for small and medium-sized enterprises also increased, making business operations difficult. Current interest rate increases will directly impact repayments as early as September for new loans and around January 2025 for existing borrowers.
In addition, this affects the business performance of companies borrowing money in Japan, so Mr. Kasumi Miyajima believes that the impact will be even greater if the economy continues to grow or does not become a drag on the economy. economy.
Global market strategist Tomoo Kinoshita of Invesco Asset Management Company assessed that the yen's appreciation at such a rapid rate is a rare event other than currency intervention and not recognized by the stock market. Popularity. In addition to the decline in export-related goods due to the rising Yen, sectors that were thought to be unaffected fell and were widely sold.
Although the strong Yen is a short-term drag, the expert remains optimistic about the outlook for Japanese stocks. The Nikkei average will likely rise to around 43,000 points by the end of the year. At the same time, the rapid appreciation of the Yen is expected to subside soon.
Particularly for Vietnam, increasing interest rates and the Yen are estimated to have a certain impact. According to the Research Department from BIDV Securities Company (BSC), Vietnam's increase in real public debt is the first influence, which can then cause direct investment (FDI) and indirect investment (FII) from Japan. Reduced version. Furthermore, a rising Yen will have a positive impact on export businesses and a negative impact on businesses importing goods from the Japanese market. At the same time, it also negatively impacts businesses using debt denominated in Yen.
Remittance flows from Japan are also affected. Vietnamese workers in Japan will benefit if the Yen appreciates because they can receive higher deposit interest rates when depositing money in Japan and have higher income when converted to USD/VND.
