O’NEIL: Asian crisis could be imminent
According to renowned analyst Jim O’Neil, who was Goldman Sachs’ chief economist during the Asian crisis, there will be a further decline in the Japanese yen, a crisis of the magnitude the 1997 Asian financial crisis. Economic turbulence may result.
According to veteran economist Jim O’Neill, economic turmoil on the scale of the 1997 Asian financial crisis could ensue if the Japanese yen continues to decline.
The famous economist, who stated that the danger would increase if the dollar/yen exchange rate, which stands at 133, rises to the level of 150 dollars, said in an interview yesterday that such a decline could lead to China intervening in the foreign exchange market.
The yen fell almost 14 percent this year, falling to 134.56 today, its weakest level in the last 3 months. The yen’s fall was due to the divergence between the Bank of Japan’s low interest rate policies and the high interest rate policies of other major central banks.
The UK Treasury Secretary, chief economist at Goldman Sachs during the Asian crisis and now senior advisor at Chatham House, said: “If the yen continues to weaken, China will see it as unfair competition. It was the same with the Asian financial crisis. “China doesn’t want other currencies to threaten its economy,” he said.
The famous economist, noting that with the depreciation of the yen and Japan’s advantageous position in exports, China may also devalue the yuan, said: “We see that the Bank of Japan continues to control the yield curve and Die Bond yields in the US continue to rise. “If we continue to see this, such momentum and depreciation could cause serious problems in Beijing,” he said.
While the Chinese economy is currently grappling with the impact of the zero-Covid policy, news from sectors such as technology and real estate confirms that economic and financial risks have increased.