Interest rate hikes cannot stop the continuous depreciation of the exchange rate. The Japanese yen has fallen to its lowest level in nearly 40 years.

Although the Japanese government has raised interest rates and intervened in the foreign exchange market, the yen exchange rate still fell to near 40-year lows. On June 29, the yen fell against the US dollar, with an exchange rate of 161.9000 as of 20:56 Beijing time. Japanese government officials have repeatedly emphasized that they will take appropriate intervention measures against excessive exchange rate fluctuations, and the market remains highly vigilant against foreign exchange interventions. However, looking back at previous intervention operations, they have only had short-term effects and failed to change the long-term trend of yen depreciation, causing the market to become increasingly immune to traditional intervention methods. Placing hope on the Bank of Japan also faces the reality of fiscal constraints on monetary policy adjustments. In this "defensive battle" over the yen exchange rate, the Bank of Japan is stuck in a dilemma of "having the intention to stabilize but lacking the ability to reverse the trend".