This is almost total nonsense. The only possible way it could be true is if the amount of intervention in the renminbi was unaffected by the price level, and this is certainly not the case. If it were, the People’s Bank of China should anyway immediately raise the value of the renminbi substantially in order to improve its terms of trade at no cost

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As previously shown, Japan has a rather balanced trade situation, and has a current account surplus. This presents a natural “floor” for the currency vs other currencies.

On the other hand, the United States has a structural multi-decade trade deficit and current account deficit.

Because the US trade deficit is so large and structural, when we shift

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in the latter half of the 1980s, as their currency rapidly strengthened against the dollar. While a strengthening yen would benefit Japanese consumers, the products of various Japanese exports became a bit less competitive. Fortunately, their quality-to-cost ratio was very high.

Japan responded with monetary easing, fiscal stimulus, and financial

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