Fiscal and monetary policy makers in Japan ignored the gradual tightening policies pursued by the US Federal Reserve in raising interest rates, which widened the gap between monetary policy in the two countries and led to a record drop in the Japanese yen to its lowest level in 20 years, recording 129.43 yen against the dollar.
Talking to QNA, economic expert and CEO of Al Dar Exchange Company Jumah Al Maadhadi said that the decline of the Japanese yen against the dollar reaps its benefits to the Qatari private sector, the categories of Qatari suppliers and tourists, pointing out that they benefited from the strength of the riyal against the yen, which is reflected in their chances of importing lower prices due to the decline in their value against the dollar, as well as the attractiveness of foreign investment, which opens investment opportunities in countries whose currencies have witnessed a decline against the dollar.
Al Maadhadi added that the Qatari riyal’s link to the US dollar and the yen’s decline against the dollar means the riyal gaining additional strength against the yen, pointing out that the riyal is reaping the strength of the US dollar after the recent policies of raising US interest rates on the dollar, and that the depreciation of the Japanese yen will be in the interest of everyone who visits Japan in terms of obtaining services at lower prices than it was in the past.
The CEO of Al Dar Exchange Company indicated that the Qatari riyal will reap strong dollar gains against all currencies that fell against the dollar, especially after the Japanese yen’s fall to record levels, recording 129.43 yen against the dollar, therefore, dealers and trading partners with Japan, whether they are individuals or companies, especially consumers, investors and companies, benefit in the long term, which provides them with greater investment doors.
With the increasing conflict between the Central Bank of Japan, which aims to continue the monetary easing policy, and the plans of the US Federal Reserve to accelerate the pace of raising interest rates more than once this year to face the high levels of inflation, the price gap between the two currencies will widen and put more pressure on the Japanese yen, which has lost about 4.5 percent against the dollar since the beginning of April.
Dr. Layal Mansour said that there are internal and external factors that lead to a depreciation of the currency. The internal factors are monetary expansion policies or the so-called quantitative easing policies such as those followed by the Central Bank of Japan and reducing the interest rate to its lowest levels to stimulate economic growth, while the external factors lie in imported inflation such as the current rise in energy and food prices and others, she said.
Japan is a major trading partner of Qatar, and one of the major importers of liquefied natural gas (LNG). The Central Bank of Japan is scheduled to hold its monetary policy meeting next Thursday.
