Today is the day of interest rate hike, and the trend of the US dollar against the Japanese yen is really outrageous and counter intuitive. The Japanese yen has depreciated by 2 yuan from 155-157, and even hit 157.66 at one point just now. From this perspective, Japan's interest rate hike today is better than not raising it, which directly shows the market through the predicament of Kazuo Ueda's lack of bullets. Japan's nominal interest rate has now increased to 0.75%, but core inflation is 3.0%, So the actual interest rate is 0.75% -3.0%=-2.25%. The nominal interest rate in the United States is currently around 3.5%, and inflation is 2.7%, So the real interest rate=3.5% -2.7%=0.8%. There is a spread of 2.25%+0.8%=3.05% between the two countries. Previously, the market was worried that Kazuo Ueda would be very hawkish and say that interest rates would continue to rise in the future, but he admitted that Japan's real interest rates were extremely low. The capital completely relieved its worries and rushed back to continue doing Carry trade. As a result, a large number of people sold Japanese yen to buy US dollar assets, and the exchange rate quickly collapsed, Next, we may have to approach the key psychological integer of 160 before the Bank of Japan intervenes. Do you remember the market speculation that the Bank of Japan may sell US bonds and intervene in the exchange rate during the Thanksgiving holiday when liquidity is poor? However, with Japan having to pay a $550 billion protection fee to the United States and needing support from the United States during the China Japan crisis, Japan may not have the confidence to operate independently.