Because of the rules of the WTO game, malicious low-price competition is not allowed. That is to say, once you sell something at the price of 1 yen, when your currency appreciates, you have to sell something above 1 yen, which leads to the gradual loss of commodity competitiveness and economic recession. Without WTO restrictions, if the local currency appreciates and more resources can be purchased with less money, then exporters can sell their products at lower prices, which is more conducive to competition and of course to the development of the domestic economy.

First, the root of Japan's rapid economic recession and long-term depression lies in the bursting of the stock market and real estate bubble.

199 1 year later, due to the stock market crash and real estate bubble, Japan's economy experienced rapid recession and long-term depression. The bursting of the asset bubble made all Japanese banks bankrupt, bad debts accumulated, and the credit to enterprises contracted sharply (after 1994, the credit growth of Japanese commercial banks to enterprises was much lower than1%for a long time); The bursting of the asset bubble has dealt a heavy blow to the investment enthusiasm and personal consumption desire of enterprises. After the bubble burst, Japan's consumer spending has been negative for a long time (as high as 7%), and investment spending has also been sluggish for a long time. Shrinking credit, sharp decline in consumption and sluggish investment have all led to the rapid decline of Japan's economy.

Second, the root cause of Japan's bubble economy (especially the stock market and real estate bubble) is the expectation that asset prices will continue to rise. The expectation of the long-term appreciation of the yen has led to speculation in the stock market and real estate at home and abroad. Japan's bubble economy from 1986 is a miracle in the world economic history, amazing, amazing! The crazy rise of Japanese real estate and stock market has broken the record of human history. 1986 Nikkei index was only 12000 points, and 1989 soared to 39000 points in the second half of the year, with an increase of over 300%. The inflation rate of real estate is not lower than that of the stock market. When the real estate reached its peak, the total market value of Tokyo real estate exceeded that of the United States! The crazy rise of the real estate market has made countless Japanese believe that they are unique, and even believe that the Japanese stock market will never rise or fall! (The so-called Japanese characteristics are also! Isn't there countless people in China who believe that the China stock market will only go up and not down? Just like the Japanese in those days, they also regarded the "China stock market with characteristics" as a fantasy! )

There are two sources of funds for speculation in Japan's asset market: one is domestic funds in Japan. Japanese banks lend to speculators unscrupulously, which is the direct cause of the mountain of bad debts of Japanese banks. A large amount of funds from Japan's trade surplus also participated in the speculation of asset prices. Second, the international fund. In the early 1980s, Japan realized full convertibility of its capital account and free entry and exit of international funds. Although Japan began large-scale overseas investment from 65438 to 0982, the expectation of long-term appreciation of the yen attracted a large number of international funds to enter the Japanese stock market and real estate market.

Third, the expectation of long-term appreciation of the yen is rooted in the Plaza Agreement of September 1985. 1On September 22nd, 985, five western countries, led by the United States, signed the Plaza Agreement, announcing: "We demand that other major currencies continue to appreciate against the US dollar in an orderly manner". The Plaza Agreement mainly requires the yen to continue to appreciate. The day after the agreement was signed (September 22nd), the Federal Reserve entered the foreign exchange market to buy yen and sell dollars, which directly promoted the appreciation of the yen. Within one year after the signing of the Plaza Agreement, the appreciation of the yen will exceed 20%! Since then, the RMB has almost entered the track of unilateral continuous appreciation. Although the yen entered the appreciation track after the impact of 197 1 Nixon in August, before 1985, the yen did not continue to appreciate unilaterally, but rose and fell.