Since last year, the yen has depreciated sharply, mainly because Japan raised the consumption tax rate in the first half of last year, and the Bank of Japan started QQE to hedge the impact of the increase in consumption tax, which led to a sharp depreciation of the yen in the second half of last year.

In the future, Abe may continue to raise the consumption tax to 10% for the continuation of government reform. In that case, the depreciation of the yen may continue. However, if Abe stops raising the consumption tax, this round of depreciation caused by consumption tax will come to an end and the yen will re-enter the stage of shock consolidation. At that time, the fluctuation of the yen exchange rate will not be too obvious, and the overall direction tends to appreciate slightly.

In addition, it should be noted that the yen is a safe-haven currency, and when global risk aversion is triggered, it will also push up the trend of the yen.