The Plaza Accord of 40 years ago led to Japan losing three decades of growth; the current significant devaluation of the yen and the United States' exploitation may lead Japan to become a third-rate country completely.

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We need to understand that since the signing of the Plaza Accord 40 years ago between the United States and Japan, which caused the yen to appreciate and destroyed Japan's mid-range manufacturing industry and the housing and stock market bubble, Japan has entered a long recession that has lasted for 30 years. The scale of Japan's GDP has not increased but decreased since 1995, falling continuously to the present day; in 2023, Japan's GDP has already fallen to only 70% of what it was in 1995.

At the same time, Japan's global ranking in terms of GDP per capita has also plummeted. It is important to note that Japan's GDP per capita was as high as $44,000 in 1995, surpassing the United States and becoming the number one among the G7 industrial nations. On a global scale, it was also the fifth in the world, only slightly less than the per capita GDP of small countries like Switzerland and Sweden.

If we only compare the main economies with a population of more than 10 million, then Japan was truly the first; not relying on resources or finance, but relying on a strong manufacturing industry, it became the richest country.

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But today, Japan's GDP per capita is already at the bottom among the G7 industrial nations, even less than the unremarkable and messy Italy in Europe; in terms of global ranking, Japan's GDP per capita has also dropped to around 40th place.

Today's Japan no longer has any leading products that can influence the world. The once glorious Japanese manufacturing in home appliances, chips, shipbuilding, displays, mobile phones, etc., has disappeared from the world stage during the 30-year recession.

Even the last trump card - automobile manufacturing, is also facing a strong challenge from Chinese electric and smart cars; being knocked off the horse is just a matter of time.At this critical moment! Just when the internal strength of Japan's economy and industry was about to be exhausted, the United States delivered a fatal blow. The US dollar began to shrink its balance sheet from April 2021 and started aggressive interest rate hikes in March 2022; during the balance sheet reduction period, the fragile yen, among the major economies, was the first to buckle and began a significant devaluation against the US dollar.

Japan had once tried to save itself. In 2022, Japan had sold more than 200 billion in US debt to buy yen and prevent currency devaluation. The yen also stabilized for a while, rebounding and appreciating against the US dollar by 15% at one point.

However, just as Japan was selling a large amount of US debt, a sudden change occurred within the East Asian island, with the unexplained death of Prime Minister Abe, which brought Japan's action of selling US dollars to a sudden halt.

From then on, Japan no longer dared to use the method of selling US debt to prevent the yen from devaluing. Not only did it not dare to sell US debt, but the Bank of Japan instead went crazy buying US debt and selling yen when the yen was significantly devalued.

The Bank of Japan shorted its own yen to carry the sedan chair for the United States and US debt, showing an unusually obedient and loyal attitude.

As a result, under the continuous interest rate hikes of the US dollar and the Bank of Japan's own shorting of the yen, the yen

Starting from April 2023, it once again started a major devaluation mode; this year has been even more crazy, with the exchange rate once breaking through 160, reaching the lowest value since the Plaza Accord.

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Do you know what this crazy devaluation of the yen means for Japan, which has an energy self-sufficiency rate of only 4%?This implies that the last vestige of vitality in Japan's manufacturing industry will also be drained. Over the past three years, the Japanese yen has depreciated by 33% against the US dollar, while international energy prices have soared by 60%; taking into account the weighted average, the price of Japan's imported goods (including energy, food, industrial components, and raw materials, etc.) has doubled in the past three years.

The doubling of energy and industrial raw material costs is a fatal blow to the manufacturing industry. We need to understand that energy costs and industrial raw material costs generally account for 30%-60% of manufacturing costs, with a higher proportion for higher-end manufacturing.

The doubling of Japan's import costs means that Japan's manufacturing costs will increase by 30%-60%. Japan's manufacturing prices were not very competitive to begin with, and with costs surging by 3-6 times, Japan's manufacturing industry, especially the remaining high-end manufacturing, can be wiped out in one fell swoop.

In fact, Japan's trade performance over the past three years has also proven that its high-end manufacturing industry is on the brink of collapse and in a precarious situation. In 2019, Japan's trade surplus in goods was 55.36 trillion yen. However, with the sharp depreciation of the yen against the US dollar and the soaring energy costs, Japan's trade turned into a deficit of 1.47 trillion yen in 2021, and the trade deficit in 2022 was even more terrifying, reaching 19.9 trillion yen; in 2023, due to the decrease in energy prices and a temporary rebound in the value of the yen, the trade deficit narrowed, but it was still as high as 9.29 trillion yen.

For a country like Japan, which is based on trade and manufacturing, three consecutive years of huge trade deficits are proof of the comprehensive collapse of its domestic manufacturing industry, especially the high-end manufacturing industry.

Finally, a cruel question is put in front of Japan: What is left for Japan without high-end manufacturing? It may only be left with the tourism and custom industries, becoming similar to island countries like Sri Lanka and the Philippines.

Of course, the above statement is slightly exaggerated, but some East Asian economic institutions predict that in the next 5-10 years, Japan's per capita GDP will fall to the range of 20,000 US dollars, similar to Spain, Greece, and the Czech Republic, becoming a mid-level developed country.