In fact, in this round of currency wars in Asia, it's not just the Japanese yen that has suffered.

Almost all Asian currencies, with the exception of the Chinese yuan, have been hit hard by the US dollar.

This impact has shaped the Asian currencies in various ways, and it also signifies something for the US dollar.

What does this mean for the US dollar and how will the Asian currency situation unfold next?

Let's briefly discuss these issues today.

According to data on 150 currencies tracked by Bloomberg, two-thirds of them have depreciated against the US dollar.

Among them, Asian currencies have performed the most prominently, leading many Asian countries to launch a defense of their currencies against the relative appreciation of the US dollar.

The relative appreciation and depreciation of these currencies fundamentally stem from the historical fact that they have all been incorporated into the US dollar system.

Unable to break free from the US dollar system at present, they have to respond to the interest rate hikes by the Federal Reserve, which is a reality inherited from the past.

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If we look at the current situation, it is the expectation of the Federal Reserve's interest rate cuts that is gradually being lowered.

Under such circumstances, the US dollar strengthens against currencies under the US dollar index due to high interest rates, pushing up the US dollar index and subsequently affecting the global currency market, which has become a natural occurrence.

On May 2nd, not long ago, the Federal Reserve's interest rate meeting announced that the US interest rates would continue to be maintained in the range of 5.25-5.5%.

This is the sixth time since September last year that the interest rate has remained unchanged at the interest rate meeting.

This undoubtedly further suppresses the expectation of interest rate cuts.

At the same time, in terms of inflation, in recent months, the US inflation rate has been getting further and further away from the target of 2%.

For example, the core personal consumption expenditure price index, which is very core in CPI, also known as PCE, has increased by 0.2 percentage points year-on-year to 2.7%.

Excluding the more volatile food and energy prices, the core PCE in the United States in March also increased by 0.3% month-on-month, and the year-on-year growth is 2.8%.

This means that in March, there was no sign of inflation slowing down in the United States.

Even if inflation is just a cover for the Federal Reserve, this performance indeed makes the decision to maintain high interest rates stand firm.

In terms of employment, in April, the United States added 175,000 non-farm jobs, which to some extent is still quite hot.

This indicates that the reduction of high-end positions is still continuing, so more people who originally did not need to work have participated in the competition of the labor market.

However, this number is far lower than the 315,000 in March and is significantly lower than the market expectation of 243,000, but it is obviously much higher than the 100,000 new jobs needed to maintain a stable unemployment rate in the United States.

The year-on-year increase in the average hourly wage of employees in the United States in April is 3.9%, which is the first time since 2021 that it has fallen below 4%.

That is to say, prices are rising rapidly, but the wages of Americans are rising slowly.

These data combined naturally lead to Powell's statement at the interest rate meeting that the current US economic data does not support interest rate cuts, and at the same time, he also said that there is not enough confidence to cut interest rates three times within 24 years.

In this way, the expectation of the Federal Reserve's interest rate cuts is once again postponed, and the reaction in the market is that the US dollar depreciates against the six major currencies, among which the Japanese yen takes the lead, falling rapidly, giving the US dollar index incomparable support and making it reach new highs continuously.

When the Japanese yen broke through the high position of 160, it once went to the position of 106.

And now, that is, when we are writing the manuscript, the US dollar index has already reached a high position of 105.

HSBC even believes that factors such as US Treasury yield, other central banks being forced to be more dovish by the Federal Reserve, and the increasing pursuit of safe-haven assets can push the US dollar index to the position of 107.

As for whether it can be done or not, it is actually very difficult to judge just by looking at the economic and currency situations.

This ultimately has to be decided by geopolitical factors, but we will not discuss it today.

We just want to remind everyone that if you are not a professional, this stage has returned to the stage of holding currency and waiting and watching, and you must be cautious in investing.

We have already made a video about the performance of the Japanese yen before, and its trend of continuing to depreciate is inevitable.

When the manuscript was completed, the Japanese yen once again reached the high position of 156.

If Japan wants to stabilize the yen again, Japan has to rise, but Japan has to ask the Japanese elite class who can also make a lot of money in this process whether they agree or not.

Even if Ueda and Nan are very hawkish, Japan's own conditions are like that, and it is useless to shout loudly if it cannot be hard itself.

These do not need to be repeated.

We do need to pay attention to a few other Asian countries.

The first is South Korea.

As two economies that have a deep impact on Asia, Japan has already escaped the fate of being on the table, so what about South Korea?

On May 7th, the latest data released by the Bank of Korea showed that as of the end of April, the scale of South Korea's foreign reserves was $413.26 billion, which was $5.99 billion less than the foreign reserves of $419.25 billion in March.

This has created the largest decline in South Korea's foreign reserves in 19 months.

So how did this money decrease?

The Bank of Korea said that the reduced foreign reserves were due to the adoption of "market stabilization measures."

So what market is stable?

In mid-April, the exchange rate of the US dollar against the Korean won once broke through the key position of 1400, setting a new high since the end of 2022.

At that time, the South Korean authorities immediately issued a stern warning, saying that in order to prevent excessive exchange rate fluctuations, they would actively intervene in the depreciation of the Korean won.

The Ministry of Strategy and Finance of South Korea and the Bank of Korea jointly issued a statement saying that the foreign exchange authorities are closely monitoring the exchange rate trends and the supply and demand dynamics of the foreign exchange market with special vigilance, and at the same time clearly stated that excessive one-sided fluctuations in the foreign exchange market are undesirable for the South Korean economy.

These words sound very vague, but in fact, it is very simple to translate them.

It is South Korea's call to the currency market, saying that you guys are making the Korean won depreciate so much against the US dollar, and we cannot accept it.

Don't go too far, otherwise, we will take action.

This is the first time in 22 months that these two South Korean institutions have jointly carried out "verbal intervention" in the foreign exchange market.

Of course, it is estimated that it is useless to just shout later, and South Korea will wait until late April and feel that verbal warnings are useless, and then take action.

After that, in late April, the Korean won quietly fell below 1400, and by May 7th, that is, when the Bank of Korea announced the data, the Korean won returned to the position of 1360, which was temporarily preserved.

During this period, overseas investment institutions estimated that the Bank of Korea used at least more than $3 billion in foreign reserves to intervene in the exchange market, thereby stabilizing the exchange rate of the Korean won, and the time of intervention was obviously after the verbal warning.

South Korea's response can be said to be very typical, and most countries in the Asian region are in a similar situation to South Korea.

As a country that is mainly based on imports and exports, although South Korea's export volume is not small, it can be called one of the world's major exporting countries, but its exports are greatly dependent on the import of raw materials.

And raw materials on the commodity market are settled in US dollars.

The depreciation of the Korean won against the US dollar means that the original 1 US dollar can be bought for 1300 Korean won, but now it has to be 1400 Korean won to buy, which greatly increases the pressure of South Korea's imports.

And the cost price rises, but the export commodity price cannot be increased casually.

If you raise the price, others will not buy from you and will go to buy others, such as products from China with more stable currency values.

What should we do?

So the export commodity price has to be maintained, which is destined to reduce the profit of South Korea's exports due to the rise in costs.

Even if the US dollar is too strong, other countries also face the problem of currency depreciation.

When they import, they are more inclined to low-priced products.

South Korea's export products may have to reduce the price.

If this is the case, the profit of South Korea's exports will be reduced even more.

This kind of decline is not something that can be compensated by the devaluation of luxury goods becoming cheaper and Chinese people going to travel and shop.

The gap between the two is not comparable at all, and it is basically a comparison between two dimensions.

According to the report given by the Korean Economic Research Institute, the negative impact on the enterprise groups that are borrowing overseas to expand facilities, as well as companies in the fields of steel, chemical, energy, and airlines, is very large.

It should be easy for everyone to see that the negative impact of these fields cannot be compensated by the devaluation of tourism and general consumer goods being pushed up by overseas tourists and buyers.

From this, we can also see that the negative impact of the sharp depreciation of the Korean won is far greater than the positive impact.

There are also such situations in Japan, Indonesia, the Philippines, Malaysia, Vietnam and other countries.

Among them, Vietnam is even more bleak, which we will talk about in a special video.

Indonesia responded to this impact by raising interest rates through the central bank.

Currently, the Central Bank of Indonesia has raised interest rates by 25 basis points, and the interest rate has reached 6.25%.

This year's first interest rate hike expressed Indonesia's attitude, but the effect is still to be observed.

The Governor of the Central Bank of Indonesia, Perry Warjiyo, said at a press conference that Indonesia will continue to use all available tools to maintain the stability of the Indonesian rupiah.

From this point of view, Indonesia will not be forced to the front by the United States in the Asia-Pacific region.

The Philippines is not so active in this regard.

Its central bank stood up when the Philippine peso broke through the 57 level and said that unless the exchange rate fluctuates very violently, it tends to allow the exchange rate to adjust.

The implication is that as long as it does not fall too much, the Philippines can endure it.

So we see that the Philippines allows the United States to insert missiles on itself, and also runs to join military exercises, and even when its own currency depreciates, it still provokes us in various ways.Thailand's currency has depreciated by nearly 7% from the beginning of this year to the present, but it has recently started to rebound slightly, stabilizing at around 36.72 at the time of writing.

The Thai authorities are doing their utmost to support the Thai baht.

As a country that has suffered a heavy toll in 1997, it is likely to deeply understand the importance of maintaining currency stability.

On the Indian front, although the rupee is also depreciating, it seems to have a low sensitivity to the US dollar.

It has depreciated from 82.74 in March to 83.6 at the time of writing, and the overall fluctuation is indeed small compared to other Asian currencies.

This seems to give India the confidence to play a fence-sitting role in the Asia-Pacific region again, benefiting from its ability to switch sides.

From the above analysis, it is not difficult for everyone to find that our ultimate focus will be on geopolitics.

There are objective reasons for this.

Now that the US dollar has been raising interest rates for a long time, the pump has almost drained the pond it is facing.

If it wants to continue to make gains, relying solely on currency operations to devalue other currencies and then take advantage of the dollar's hegemony to seize assets at low prices, it is no longer possible to prevent the collapse of the dollar system.

In this process of collapse, there is an economy that can always maintain its own stability, which is China.

Based on this, I don't need to talk about various theories of China's threat.

The recent performance of the United States' Asia-Pacific strategy has made it clear that it wants to push things in a more extreme direction.

At this time, how to make the economies of the Asia-Pacific region, like Japan, become its own unsinkable aircraft carrier?

Naturally, it is like what Huang Shiren did to Yang Bailao, first pushing these economies to the brink of collapse, and then the United States creates cards out of thin air, saying that as long as they listen obediently, they can stabilize their economies.

As long as these economies can listen, the United States can naturally bring the confrontation into a situation of cold war plus proxy war that it is relatively familiar with, thereby affecting us and forcing the capital that has already regarded us as a safe haven to flow out again by creating regional turmoil.

It is important to know that the stability of the renminbi has been verified by the market, and the Chinese market has become one of the "safe havens" in the international capital market, which is an indisputable fact.

The de-dollarization challenge faced by the US dollar itself, with the development of issues such as Russia-Ukraine and Palestine-Israel, has made more and more economies and capital question whether the US dollar can solve this challenge.

In this way, more and more capital is flowing out of the dollar system and changing its course.

How to face such a challenge?

Or how to solve such a problem?

For the United States, the best way is to let the safe haven also set off waves.

It is impossible to set off waves on the currency side, so it is on the geopolitical side.

Therefore, the next economic and geopolitical turmoil in the Asian region should become more and more frequent.

This is the real purpose of the dollar's strength this time and hitting the waist of various Asian currencies.

So if Asian currencies want to avoid this impact and find a stable way, it is not up to them.

Fortunately, our own strategic determination is very sufficient, and the Asia-Pacific region today is no longer the Asia-Pacific region of 20 years ago.

Let's wait and see the game in this turmoil.