미국과 일본의 ‘엔저 방어’ 동상이몽 [유레카]

For a span of seven years between 1979 and 1987, the former Federal Reserve Chairman Paul Volcker carried a concealed service revolver in his body. In an attempt to curb inflation, he raised the benchmark interest rate to as high as 20%, resulting in a severe economic downturn that forced him to deal with assassination threats. His image was plastered all over the streets.

Of the 30 former governors of Japan's central bank, the Japan Bank, two of them were assassinated after leaving their positions. Dakahashi Koreikiyo, who served as finance minister for seven years (1911-1913), was murdered by right-wing soldiers who stormed his office in 1936. He had implemented a gold exchange standard in December 1931, pegging the country's currency supply to gold, and led massive fiscal spending to overcome the subsequent Great Depression.

However, the deteriorating finances and soaring inflation subsequently forced him to cut military budgets, leading to his wrath. Meanwhile, Inoue Junnosuke, who served as the 9th and 11th governor (1919-1923 and 1927-1928), returned to the gold exchange standard in January 1930, introduced stringent contractionary policies, and marked the onset of the early 1930s "Showa Depression" in a tragic atmosphere.

The tragic fate of monetary and economic policy chiefs in the militaristic atmosphere underscores one of the key lessons in Japan's current economic policy-making: prioritizing stability above all else. Representative "right-wing" figures like Scott Besant, the current U.S. Treasury Secretary, are well-known for their expertise in foreign exchange investments, having earned fame through Wall Street.

His infamous story includes betting on the British pound's depreciation and bowing to the Bank of England. In 2013, Abe's economic policies ("Abenomics") were initiated despite predicting the yen's weakness, resulting in significant profits. Recently, the joint market intervention by the United States and Japan to defend the yen (the "Enza" weakening) is a result of their differing monetary policies intertwining.

Due to pressure from former Prime Minister Kan Naoto to implement a series of large-scale economic growth policies, the Bank of Japan hesitates to raise the benchmark interest rate. If the Bank of Japan were to sell large amounts of U.S. government bonds instead of raising interest rates, the U.S. market interest rates would surge, posing a threat to the U.S. economy.

The upcoming November midterm elections also pose a significant disaster for the United States. The uncertainty surrounding the shift in interest rate policies and the conservative stance of the Japanese government, along with Scott Besant, who has switched from "attack" to "defense" against the yen under the Trump administration, are making their way through a complex path.

Caught in the middle of these complicated maneuvers, the global market might not see a favorable wind soon.