Bank of Japan’s Interest Rate Hike Triggers Market Crash
Written by: Stephanie Zhou
Researched by: Keith Low, Annie Liang
Edited by: Kate Sum
Image Credit:
TOKYO — On Aug. 5, Japanese stocks saw their largest drop since the 1987 Black Monday sell-offs, driven by concerns over the profitability and stability of investments funded by the yen. This drop can largely be attributed to an investment strategy known as “carry trade” which involves borrowing currency at a low cost in order to achieve higher returns in another currency. The goal of this strategy is to profit off the difference in interest rates while waiting for more favorable exchange rate movements.
Japan’s long-standing history of maintaining low interest rates made the yen a popular choice among investors for carry trading. Investors would borrow yen at a low rate and use it to purchase currencies such as the U.S. dollar, Mexican peso or New Zealand dollar, using the stronger currencies to invest in bonds and other financial instruments. This practice provided lucrative returns when the overall economy was stable, offering an annual return of 5 to 6% on dollar-yen carry trades.
When the Bank of Japan decided to raise its key interest rates on July 31 from a range of zero to 0.1% to about 0.25%, it greatly boosted the value of the yen. Thousands of carry traders scrambled to sell higher risk assets purchased using the yen to cover the higher borrowing price and losses in financial exchange rates. With each sale, the volatility of each asset increased, causing more and more traders to sell their assets. By the end of the day, Japan’s Nikkei 225 index, comprising Japan's top 225 companies that are listed on the Tokyo Stock Exchange, had dropped by 12.4%. Fortunately, the financial market was able to stabilize the following day, with the Nikkei 225 index increasing by 10.2%.
Following the market collapse, the Japanese economy has seen considerable growth, expanding by 3.1% in the second quarter. These results provide solid backing for future interest rate increases, although the bank will likely remain cautious in the aftermath of July’s rate increase. However, Takehito Masuzawa — head of equity trading at Phillip Securities Japan — adds that Japan’s low interest rate policy is expected to continue despite its current push for increased interest rates.
Dollar-yen carry trading will likely be less lucrative in the coming months following this increase in interest rates, especially with growing concerns surrounding U.S. interest rate cuts following fears of a looming recession.
Celebrating Our Asian and Asian American Olympic Athletes
Written by: Carmen Tan
Researched by: Doris Tung, Andy Huang, Jasmin Pais
Edited by: Rui Zheng
Image credit: https://www.iheart.com/content/2021-07-29-usas-suni-lee-wins-gold-in-womens-individual-all-around-gymnastics-final/
PARIS — Every four years, the Summer Olympics roll around for countries around the world to unify into one large tournament of varying sports and recognized competitions. As each country sends their competitors, viewers everywhere join in from their homes to watch and cheer for the countries of their choosing. This year is no different; as winners were announced after every event, many Asian Olympians went home with their duffel bags about 530 grams heavier.
Many athletes went viral on social media for their achievements at the Olympics. For 18-year-old silver medal winning gymnast, Zhou Yaqin, that’s the exact situation that occurred. The Chinese gymnast went viral for her “little sister energy” when she replicated her fellow medal winners in the classic tradition of biting into the Olympic medal. Another silver medalist from South Korea, Kim Yeji went viral for her cool demeanor while competing in the pistol event. Following the Olympic event, many photos and videos of Kim circled the internet, where netizens commented on her shooting gear as well as her demeanor while competing, reminiscent of popular figures in spy movies or anime.
This year’s Olympics contained many firsts for Asian athletes. In the 10-meter air pistol event, Manu Bhaker became “the first Indian ever to win twin medals in a single edition of the Games.” In total, India won six medals in Paris. Swimmer Pan Zhanle set a world record by beating his own in the 100-meter freestyle event, at 46.40 seconds — a faster record than his first by .40 seconds. Sunisa “Suni” Lee is another popular Olympian, having won three medals in her gymnastics events and bringing an incredible comeback after performing poorly during practice. Lee ended her 2024 Olympic cycle with a total of six medals throughout her career, celebrating with her family as the first Hmong-American Olympian.
The many Olympic athletes have celebrated their victories with their families, friends and hometowns, sharing their victories with everyone around them. For Filipino gymnast Carlos Yulo, winning his two gold medals for the Philippines prompted a celebration of steak dinner and a trip to Disneyland Paris. Additionally, Yulo declared his plans on returning to the next round of the Olympics to defend his title and “show everyone that I’m worth [sic] of a gold medal in all my performances in my competitions.” In the town of Arlington, Virginia, Chinese American swimmer Torri Huske returned home carrying five Olympic medals, winning gold in three swimming events and silver in two. The town hosted a large-scale donation event to the Arlington Food Assistance Center on her behalf, which included autographing for aspiring athletes and young residents of the town.
As the Asian medalists from the Paris Olympics receive worldwide recognition, aspiring Asian athletes follow with growing confidence that they can achieve gold as well.
Asian American Representation at the Democratic National Convention
Written and Researched by: Rui Zheng
Edited by: Jessica Kwok
CHICAGO — The Democratic National Convention was held Aug. 19-22 to officially nominate Vice President Kamala Harris as the party’s candidate for president. The four-day event featured many historical firsts for AAPI — including Harris’ nomination making her the first woman of Black and Asian descent to be the official Democratic nominee.
The AAPI Caucus meeting was held on Day 1 of the convention, which highlighted the importance of Asian American voters in swing states. According to Pew Research Center, “Asian Americans have been the fastest-growing group of eligible voters in the United States over roughly the past two decades and since 2020.” In the past four years, the number of eligible Asian American voters has risen to 15 million, many of whom reside in swing states. During the meeting, Calif. elected official Otto Lee stated that Asian American turnout will make a difference in Nevada, Pennsylvania, Georgia and Washington. He called on Asian Americans to vote, saying “As the Asian-American community, we are big on grades. But we get a D in voting. Just 55 per cent of us vote.” AAPI are 11% of Nevada’s eligible voters, placing their votes above the margin of victory for the state. AAPI cabinet members also spoke at the meeting, including U.S. Trade Representative Katherine Tai, acting Labor Secretary Julie Su and AANHPI senior liaison Erika Moritsugu. The meeting was attended by Gov. and Vice Presidental nominee Tim Walz, who stated to attendees: “I know all of you in this room know that the alternative is not a place we want to go back to.”
If elected, Kamala Harris would be the first U.S. president of Asian descent. The influence of Asian Americans in government has been increasing — currently, 22 members of Congress identify themselves as of Asian American, Native Hawaiian and/or Pacific Islander heritage. In New York, Asian Americans have become a key voting demographic — earlier this year, a special election was held to replace former Rep. George Santos in New York’s third congressional district. Both Republicans and Democrats conducted outreach to AAPI in their district, canvassing South Asian voters throughout the district.
The DNC itself hosted Asian American speakers, including Cincinnati mayor Aftab Pureval and Rep. Grace Meng. Pureval, Cincinnati’s first Asian mayor, spoke on Day 3 of the convention where he praised the Biden administration’s work on infrastructure. Pureval is seen as a rising star within the Democratic Party — he was elected mayor in 2021 and had supported President Biden’s reelection bid earlier this summer. For Rep. Grace Meng, however, her experience was not as smooth-sailing. She was originally scheduled to speak on Day 1, but was bumped from the lineup due to programming delays that the convention blamed on “raucous applause interrupting speaker after speaker.” This postponement was noticed by AAPI politicians, including New York State Sen. John Liu who called it “infuriatingly offensive and a disturbing sign that leadership continues to take for granted the fastest-growing electorate nationally and in key battleground states.” She eventually spoke on Wednesday, where she warned the audience of the threat former President Donald Trump would pose on reproductive rights.
Vice President Harris accepted her nomination on Day 4 of the convention. During her speech, she referenced her biracial background as the child of Indian and Jamaican immigrants. She said, “My mother was a brilliant, five-foot-tall brown woman with an accent, and as the eldest child, I saw how the world would sometimes treat her. But my mother never lost her cool.” After her speech, she brought family members onto the stage, showcasing her culturally diverse background.
The DNC has been criticized for having not enough AAPI voices in its speaker lineup by Democratic strategists and members of the community. Social media strategist Sam Hyun said he had hoped to see more visible representation from his community, emphasizing that the AAPI vote “was crucial to a Biden victory in 2020 … You say that you appreciate and care about the AAPI community, but actions speak louder than words.” This lack of representation was further highlighted by the convention’s refusal to grant speaking slots to Palestinian Americans, which many viewed as “erasure” of Palestinian voices. During a news conference, Rep. Rashida Tlaib stated that Democratic leadership “want[s] to erase us. They want to pretend that Palestinians and the voices that we have and the harm and the hurt [don’t] exist.” Rep. Jesus “Chuy” Garcia, whose district covers parts of Chicago, released a statement urging for a Palestinian speaker at the DNC. In his statement, Garcia emphasized the large Palestinian community in Chicagoland and stated “with many [killed in Gaza] family members of my constituents — our neighbors are in immense grief.” The Israel-Hamas war has become a point of contention within Democrats, which prompted some delegates to remain uncommitted. Members of the Uncommitted National Movement had proposed Palestinian speakers, all of whom were denied a slot by the Democratic Party. Although key figures, such as President Joe Biden and the parents of Israeli hostage Hersh Goldberg-Polin, called for a Gaza ceasefire and hostage agreement, the lack of Palestinian representation has left many progressive voters disillusioned.
The Harris-Walz Campaign Zeroes in on Asian American Voters
Written and Researched by: Melanie Nguyen
Edited by: Jonathan Zhang
As the 2024 presidential election draws near, the Harris-Walz campaign is turning their attention to the Asian American community, a voting bloc that is rapidly growing in numbers and influence. Asian Americans now represent 6% of eligible voters in the United States and play an especially pivotal role in swing states like Nevada, where they represent 11% of the voting population. Taking this into account, the Harris-Walz campaign has launched a $90 million targeted outreach effort focused on Asian-specific issues. In two newly released advertisements, it is clear that the Harris-Walz campaign is aiming to secure the support of this crucial demographic in the upcoming election.
On Aug. 19, the Harris-Walz campaign released the first of these two advertisements, titled “The Seal,” which focused on combating anti-Asian hate. In order to reach the intended audience, the campaign has ensured that these advertisements are not only running on mainstream media, but also on ethnic media outlets specifically catered toward Filipino, Hmong, Korean and Hindi-speaking audiences. Although “The Seal” has not been released in dubbed versions for each of these languages, the majority of Asian Americans who speak their native language are also able to speak English.
The second ad, titled “Reduced,” focuses on former President Trump’s attacks on the Affordable Care Act (ACA), commonly known as Obamacare. The ACA has had a profound impact on the Asian American, Native Hawaiian and Pacific Islander communities by reducing uninsured rates among AANHPI by a whopping 63%. Access to healthcare has shown to improve health outcomes and decrease racial inequalities. However, Trump had previously tried and failed to repeal this policy. The ad closes out by stating, “Trump is bad for our health.”
As the Harris-Walz team braces for a hasty 107-day campaign, it is evident that they must source support from a diverse America. The support of Asian Americans could be decisive in the upcoming election.
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