In a development that was anticipated by many, the Japanese stock market has plummeted to its most astonishing levels since the late 1980s. Behind the massive evaporation of wealth lies the fact that the wholesale price of Japanese rice has hit a 30-year high, causing widespread public distress. Japan, once the most developed country in Asia, is now becoming the first casualty of this global financial crisis.

The recent performance of the Japanese stock market has left onlookers stunned.

The decline in the Japanese stock market can be traced back to the end of July when the Bank of Japan announced an interest rate hike. Over the past six months or so, we have witnessed the Japanese economy with the yen's exchange rate plummeting against the US dollar, domestic prices soaring, and the US Treasury Department's strong demand that Japan refrain from intervening in the currency market, clearly intending to profit by shorting the yen.

The Kishida administration did not sit idly by; it once invested 10 trillion yen in foreign exchange reserves to withstand the first wave of attacks from the United States. At that time, the Japanese stock market was on an impressive rise, with a flood of hot money pouring in and a lack of tangible assets to invest in, which led to an influx into the stock market. Subsequently, the Bank of Japan raised interest rates by 15 basis points and announced a "balance sheet reduction plan." This move was necessary to preserve the exchange rate amid insufficient foreign exchange liquidity. However, this caused a sense of panic in the market, leading to a large-scale exodus of funds.

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Fumio Kishida is making a desperate move to survive.

Now, the yen-to-US dollar exchange rate has rebounded, but the Japanese stock market has suffered a crushing defeat. Meanwhile, Japan's prices have not decreased, with the rice price we mentioned earlier reaching a 30-year high, which is a concrete manifestation. What is the current state of the Japanese economy? It can be understood that, due to the competition between China and the United States over the past few years, the string that Japan has been straining for 30 years has finally snapped. At this point, people realize that Japan's total national debt has been pushed up to 264% of GDP, the highest among the world's major economies.

Over these 30 years, the Japanese government has essentially been borrowing new money to repay old debts, maintaining the zero interest rate of the yen, and using overseas investments to hedge against domestic economic weakness, barely holding on. Although the overall debt has been increasing, life has been manageable, after all, the government's borrowing comes without interest, and the borrowed money can be heavily invested in the stock market to maintain the appearance of economic prosperity.

The "Lost 30 Years" is also a stagnant 30 years.

However, the problem is that as a small island nation with extremely scarce resources, the Japanese economy is heavily dependent on imports and exports. Once the process of economic globalization is interrupted, this peculiar "cycle" of the Japanese economy cannot continue. At this time, the United States, which has been raising interest rates for over two years, has stepped in to harvest Japan and rejuvenate itself. A few days ago, the US federal debt officially exceeded $35 trillion, and it is a question of who is in a more difficult situation between the two.