Everyone has noticed the recent devaluation of the Chinese yuan, but in fact, the exchange rates of other non-US currencies have also experienced varying degrees of decline.

Taking the Japanese yen as an example, it has once again broken through the 140 mark, with a decline of 6.25% since 2023.

The cumulative devaluation of the yuan this year is 3.14%, which shows that the depreciation of the yen against the US dollar is much greater than that of the yuan.

Not only is Japan's currency performance inferior to China's, but it has also brought trouble upon itself, leading to a trade surplus with China turning into a trade deficit.

01, Surplus to Deficit

Our country's customs have released the latest trade data, and currently, the total trade between Japan and China ranks fourth, behind ASEAN, the European Union, and the United States.

Advertisement

It is particularly worth noting that in the first five months of last year, our country had a trade deficit of 59.9 billion yuan with Japan. However, from January to May of this year, we have turned into a trade surplus, with a cumulative amount of 19.88 billion yuan. The difference between the increase and decrease is 70 billion yuan.

Among them, our exports to Japan increased by 5.4%, while Japan's exports to China decreased significantly by 11.3%.

02, 3 Reasons

The reasons mainly include the following aspects:Firstly, China's exports to Japan have seen further growth. Particularly since the opening of COVID-19 pandemic control measures, China's exports have surged significantly, with many products being those that Japan needs to import in large quantities. Consequently, Japan's imports from China have also increased accordingly.

Secondly, the impact of Japan's fiscal and monetary policies on its economy cannot be overlooked. Over the past few years, inflation in Japan has been slowly rising, and domestic wage levels have seen growth far higher than in previous years. This has made Japanese export prices relatively more expensive, leading to the occurrence of trade deficits.

The third reason might be even more significant. Japan, following the United States, has also engaged in trade wars, restricting exports to China, particularly in high-tech products such as chips. However, Japan's economic community regrets this move, as South Korea has so far refused the United States' demands, which could very likely result in Japan handing over the market to its competitor, South Korea.

In summary, the reversal of Japan's trade surplus with China is a complex issue with multiple causes. This change also serves as a reminder to Japan that it needs to strengthen cooperation with us to jointly address economic challenges.

03, The Investment of the "Oracle of Omaha"

However, it is unexpected that despite Japan's mediocre economy, it has attracted significant investment from the "Oracle of Omaha," Warren Buffett. This indicates that Buffett seems to be very confident in the prospects of Japan's economy and stock market. It is reported that Buffett has substantially increased his investment in Japanese stocks, focusing mainly on the shares of the five major trading companies.Warren Buffett's investment in the Japanese stock market has attracted widespread attention from the market and has also sparked interest in Japan's economy and stock market. The main reason is that Japan's financial market is also very attractive. In essence, it is because the valuation of the Japanese stock market is relatively lower compared to other Western countries. Cheap, below Buffett's valuation, makes the Japanese stock market a "hot cake" in his eyes. Moreover, external investment in the Japanese stock market is also a helpless move, because under the continuous interest rate hikes in Europe and America, there is great uncertainty in the stock markets of Western countries. In this case, buying relatively cheap Japanese stocks, the probability of investment is naturally higher.