Yen’s depreciation against Chinese Yuan reached 17% from mide 2012

From July 17 last year to 30 March this year, the exchange rate of Japanese yen quickly fell from 8.01 to 6.65 (JPY 100 = RMB 6.65), the depreciation of yen is approximately 17%. It is believed that the depreciation of the yen is mainly due to the policy changes. Since the Abe’s coming into power in Japan, the inflation rate has increased from 1% to 2%. The government also has  clearly intention to depreciate the yen by injecting large quantity of money. The Bank of Japan’s quantitative easing policy has directly increased the supply of yen in foreign exchange markets to drive down the yen.The depreciation of the yen has a profound impact on China’s imports and exports.
Many trading business enterprises, in order to avoid risks as much as possible, have tried not to accept the orders from Japan. Some said that the they had to increase the prices in order to offset the reduced profits. The consequences of price increases may result in the loss of orders. The yen with substantial devaluation will undoubtedly cause some pressure on China’s exports, but at the same time, will also bring down the cost of China’s imports from Japan.

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