Hello, this is Lee Jin-woo with Economic Damage Control. Recently, the value of the Japanese yen has been continuously plummeting. Ultimately, raising interest rates to narrow the gap with the U.S. rates may be a fundamental solution. However, due to Japan's excessive debt, even raising interest rates is not easy. We will delve into the concerns of our neighboring country, Japan, shortly. In April of this year, the number of newborns in South Korea rebounded after 19 months. It may seem like a temporary rebound as the numbers had significantly decreased before. Various interpretations suggest that it could be a result of couples getting married and having children altogether after the end of COVID-19. There is also an interesting analysis suggesting that the decisive reason was the real estate prices in the 1990s. I will introduce more details shortly. In South Korea, the legal system is based on family relations.

Sangdo has a concept of kinship, which means that property crimes that occur among close family members should be resolved within the family whenever possible, without legal intervention. It is an exception clause in the spirit of allowing families to handle it themselves. However, yesterday, the Constitutional Court made a ruling that some provisions reflecting this kinship concept are unconstitutional. Let's find out what changes this will bring. The news will be shared. On Friday, June 28th, the program Economy with Losses begins. Following this, we have Economy with Losses. Today, we are joined by experts in the field of Economy with Losses: Director Kim Hyun-ho from the Korean History Management Institute, writer Park Se-hoon, and reporter Ahn Seung-chan. Please come in. Hello. Let's first talk about the story of the Japanese yen falling again. It has been falling for quite some time. It has dropped a lot now. It will rise, it will rise. For those investing in the yen, it's a bit of a panic these days.

Yes, that's right. In Japan, the stock prices are falling. The current exchange rate is over 160 yen for 1 dollar. This means that you need to give 160 yen to exchange for 1 dollar. This indicates that the yen has significantly weakened. The yen has dropped by a lot, the most in 38 years. Basically, because the trend is strong for selling yen and buying dollars, even if Japan raises its interest rates a bit, it's still close to zero, unlike the US, where the benchmark interest rate is now over 5%. So, if the US gives 5% interest, there's no need to hold onto yen, leading people to sell yen and buy US dollars. Moreover, considering the recent actions of the Federal Reserve Board members in the US, it seems that the US may not lower interest rates soon. With these forecasts coming out, it seems that the trend of buying dollars and selling yen is getting stronger. So, in Japan, up until now...

The central bank used dollars it had on hand to defend the value of the yen, buying a massive amount of yen with its foreign reserves. If someone keeps buying yen, the value of the yen is likely to rise, right? So, in a way, it's like Japan's central bank spending money. In April and May, the Bank of Japan spent 9.7 trillion yen to defend the yen exchange rate, which is around 80 to 85 trillion won in our currency. Despite pouring or spending this money, the yen's value hasn't changed direction and is still being evaluated. Just yesterday, the Japanese government said they would intervene in the market again to buy more yen, but despite such strong measures, the yen's value actually dropped further. So, this means that people are not really afraid of the Japanese government or the Bank of Japan intervening.

It can be seen that Japan's concerns have deepened a bit because the yen has surpassed 160 yen. So, the depreciation of the yen is quite helpful for Japanese export companies. In the perspective of Japanese export companies, it is actually very beneficial. Even if they sell an item worth one dollar in the US, when they bring that money back to Japan and convert it to yen, the revenue automatically increases. For example, if the price used to be 130 yen and now it's 160 yen, the revenue increases. Therefore, from the standpoint of Japanese export companies, the weak yen is not necessarily bad. However, from the perspective of the Bank of Japan, this is a big concern because a weak yen is too much.

If you weaken, import prices can rise. Then it stimulates inflation, and when inflation rises, eventually, the Bank of Japan has to quickly raise interest rates to control inflation. In this way, there are various ripple effects, especially Japan, which has been trying to escape deflation by borrowing a lot of money, so the Japanese government's debt is enormous. Japan's GDP is 250%, the highest in the world, uniquely high. Interestingly, the second place is not at the level of 240%, making it difficult to find a comparable high GDP of 250%. If the interest rate rises by 1%, it means that Japan has to pay 2.5% of GDP as interest every year. So, from Japan's perspective, this is a huge burden, so they want to delay raising interest rates as much as possible. It's a strong incentive for them. It's also difficult to raise interest rates, and what goes out is interest. Anyway, the interest going out is also for the Japanese people.

Since it spreads out, think of spending money and paying more interest costs. It shouldn't be difficult. From the Japanese government's perspective, there have been several experiences of raising interest rates, then the economy deteriorates. That's also a concern and fear. If they don't raise interest rates, the U.S. will continue its high-flying interest rates, causing the interest rate differential to widen continuously. Then, a lot of funds will flow out, the yen will continue to weaken, so what should we do? For now, the only thing we can do is to invest more money and buy more yen. This is a bit of a complex issue. The Bank of Japan doesn't hold all that money in cash, but mostly in U.S. Treasury bonds, right? They will sell them and eventually end up buying yen. Many such predictions are coming out, so the U.S.

Japan is the country that holds the most U.S. Treasury bonds in the world. They hold around 1600 trillion won worth of U.S. Treasury bonds, which is equivalent to 1 trillion dollars in our currency. There are speculations that they might sell these and buy Japanese yen to stabilize the exchange rate. This is a measure that the U.S. really dislikes because if Japan keeps selling U.S. Treasury bonds, wouldn't the price of U.S. Treasury bonds fall? Then, U.S. Treasury bond interest rates would rise in return. This means that U.S. market interest rates would go up. Even though the U.S. government doesn't have as much debt as Japan, they still have a debt of 100% of GDP. So, if interest rates rise, it means that the U.S. will face an increasing interest burden. Therefore, they fundamentally cannot like this, and the more fundamental issue is that the U.S. is somewhat relieving the current inflation pressure.

Playing a role is the strength of the US dollar. Because the US dollar is so strong, you can buy goods cheaply from abroad, right? From the US perspective, thanks to the strong position, imported goods have become a bit cheaper. Therefore, it becomes a factor that prevents the rise of prices in the US. If the Bank of Japan sells dollars and buys a lot of yen, wouldn't the value of the US dollar drop? Then, the concern of inflation that the Bank of Japan worries about now becomes a situation where the US should worry. Then, the US Federal Reserve will have no choice but to worry about raising interest rates due to the fall of the dollar. Therefore, people like Janet Yellen, the US Treasury Secretary, keep saying to the Bank of Japan not to intervene in the market because it works against their own interests. In a way, exchange rates are a complete.

It can be seen as a situation where zero growth is being pursued. If Japan actually sells to the United States and buys yen, and the yen does not depreciate, the problem is not resolved. Yes, in the end, Japan's bank will have no choice but to touch the card of raising interest rates. Such a forecast is emerging. If Japan actually raises interest rates, not only should we worry about the burden of the Japanese government, but also global financial markets may fluctuate. We don't know what will happen. It has been a long time since Japan raised interest rates, so we don't know how far Japan's low interest rates will spread. The result is that it's called a carry trade. Japan has low interest rates, while other countries have high ones, so they borrow a lot of money in the form of cheap Japanese yen, then invest that money abroad, like in the United States, etc. The amount of money invested abroad with that money is now $20 trillion, which is 2 quadrillion in our currency.

If the overflowing money is released, the En Carry funds in the Korean stock market are known to be around 14 trillion won. If Japan raises interest rates, the margin that can be earned through En Carry trades is likely to decrease. If this money starts to come out from various places, it could lead to a crunch. Japan raising interest rates means they won't just raise it once but will continue to do so. Therefore, the cheap money that has flowed out of Japan needs to come back quickly. If you wait a month, it will go up again, so it's obvious. There are concerns like this. So now, money is flowing out from everywhere, and what will happen next?

I don't know. That's right, there is no answer. Then, from now on, going on a trip to Japan will only get better. That's good. That's right. However, from the perspective of tourist attractions in our country, it's not a good thing. I see. Let's talk about the birth rate in our country. Let's move on to the news prepared by Park. It's not about the birth rate in our country, but now the number of newborn babies each month in our country. How many babies were born last month in Korea? Let's count this and feel sorry. This experience is repeated. That's right. It increased a little. The number of babies increased in April. It increased by about 520 compared to the previous year. So, the number of babies born in April is still below 20,000, but it's a welcoming news because the number of newborns has increased by 1 year and 7 months compared to the previous year. So, some people are saying that last year's April birth numbers are...

In April of last year, due to a sudden decrease of over 10% in births, there is an interpretation that this year's April rebound is due to the base effect. However, it is not necessarily just a base effect. There is also an interpretation that the number of births may continue to increase compared to last year for the time being. Today, I would like to talk about this a bit. For the time being, there will be more babies born. This is one interpretation. Why? Why is this? It is interpreted that the structure of our country's population has changed a bit because young people getting married these days are increasing quite a bit, and it seems that they will increase even more for the time being. According to data from Statistics Korea, the average age of first-time mothers in South Korea is 32 years old. The number of young people becoming 32 years old has been increasing since two years ago. For example, the number of young people who turned 32 last year was about 680,000, but this year, it has increased by about 8.4% to about 740,000. And next year, it will increase even more to 753,000. Then, from the year after next,

Although the number of young people turning 32 is starting to decrease again, the number of young people reaching the age of 32 will remain around 700,000 until 2030. The fact that the number of young people turning 32 is increasing means that babies born about 12 years ago in our country are now turning 32, and another group will turn 32, and now these waves of 32-year-olds are coming. From 1991 to 1997, there were a particularly large number of babies born. So, now we become curious about why there were so many babies born at that time. However, this falls within the realm of interpretation, but it is said that more babies were born at that time, especially due to the economic environment that South Korea experienced during that period. This is because from 1990 to 1997, the housing prices in South Korea hardly rose. It was the only period when South Korea kept housing prices stable for a long time, about 7-8 years.

It wasn't because of anxiety, but at that time, the government of President Roh Tae-woo established a plan to build houses for 2 million won, and that was the case when the first new cities in the Seoul metropolitan area and new city-level housing complexes in the regions were pouring out. For example, as the supply of apartments increased rapidly, housing prices stabilized. With the increase in housing factories, the construction industry was doing well. Also, with good living conditions, the income of low-income families was relatively good. It led to stable housing prices, and as a result, many children were born based on that economic environment. Following this interpretation, we come to confirm how stable housing prices positively affect the birth rate. So, in a way, stabilizing real estate prices now is very important. Of course, it's good that real estate prices are always stable, but from the perspective of the birth rate, it is also very important because

Over the next few years, there is a good possibility that housing prices may rise. Just as I mentioned earlier, because there are many young people reaching the age of marriage, like those who are turning 32 now, in the coming years, the demand will continue to increase, so they will rush to buy houses. That's right. The demand for monthly rent and self-owned homes will increase for several years, so in this situation, as many people born in the 1990s are now entering the age of marriage and settling down, if housing prices rise again and jeonse (long-term lease) prices go up, it could also lead to the disappearance of a long-awaited opportunity for population recovery. From the perspective of childbirth, it's a very welcoming news. It's like what you explained about the No Taewoo Kids, right? Yes, thanks to that. For some reason, even though I don't know why, overall, many children were born because the social atmosphere was good.

As children are now in their thirties, a lot of them are pouring out. People say that even those with thick floors will have many children, so we can have such expectations. From the perspective of real estate prices, now that they are all coming out to buy houses and even looking for monthly rent, it seems that there will be a lot of excitement. It means that demand will increase, and if we implement policies that provide incentives, a certain number of young people who are newly married need to exist for it to work, right? When we think about that, perhaps from this year until 2030, it could be the last deadline to improve the population structure of our country. It is also possible to interpret that looking at the number of babies born anew, it dropped sharply during the 1998 financial crisis, and since then, it has not recovered. Even these IMF kids have a small number, right? Well, then, within a few years, those young people...

Since it's a time when a lot is pouring down, let's try to do something then to increase it a bit. After that, even if we try hard, it won't work because the number of young people pouring in is low. It may not be easy, and the demand for housing is increasing. There may be more single-person households, you know, in the future. Because as I mentioned before, suddenly more children were born in the 1990s, looking at the sex ratio at the time of birth. The sex ratio, meaning the number of males per 100 females, is around 115, higher than that of the previous period. So, it seems that more male children were born. Ah, I see, that's why. Yes, yes. But then, if that's the case, there might be more young people living alone and unable to get married than before, you know. That's right. Yes, that's right. Also, considering the increasing population of elderly people, single-person households are expected to increase rapidly in the future. In South Korea, the number of single-person households increased rapidly at the end of last year.

About 33% of the total households now, and it is expected to increase to about 36% by 2030. Therefore, we need to prepare for real estate supply for single-person households. Due to the effect of constructing 2 million houses in the early 1990s, many children were born during the Roh Tae-woo and Kim Young-sam administrations. Now, these children are reaching marriage age, so there is an increase in marriages nowadays. However, due to the artificial gender ratio adjustment at that time, there are many more men among the youth. It is expected that more men who cannot get married among these young men will end up living alone. I understand that the number of single-person households will increase. It's interesting. Now, another hot issue that Director Kim Hyun-ho has prepared is about the concept of family covenant, which existed in Korean law, but is now considered impractical. A decision was made by the Constitutional Court on property between parents and children or among family members.

If you fight, let the country not intervene. Now, it's like fighting between the left pocket and the right pocket. Looking at it this way, it's correct to say no. It's natural to receive punishment from the country for areas that fall under this crime or if the crime is committed, such as theft, etc. But for property crimes that occur within certain family relationships, we will not punish them. That's the family special care center. Not all provisions have been decided by the members, only the decision made yesterday. It was decided not to punish theft, fraud, embezzlement that occurred among family members such as parents and children, spouses, and cohabiting relatives. The problem lies in this provision. It has been ruled unconstitutional. Yes, in such family relationships, unless it involves robbery or destruction of property, in reality, most property-related crimes cannot be punished. But originally, the law was.

Yes, there is an issue with the child. So, for example, when a child took a 500-won coin from the mother's dressing table to buy something and got scolded severely, it was considered excessive punishment. The state does not intervene, and even the law advises not to punish. Since the court won't punish, it could mean that the parents should discipline heavily at home. Additionally, in cases of property crimes committed by relatives other than immediate family members, such as siblings or spouses, prosecution is only possible if there is a complaint. So, if a nephew touches his uncle's wallet and the uncle's child living separately complains, then punishment can be imposed. However, this provision was not found to be unconstitutional; a constitutional judgment has been made. It is unconstitutional not to punish property crimes committed among family members living together, such as parents and children or spouses. Those should be punished.

Wasn't that the uncle you mentioned earlier, the uncle who doesn't live together? Was that originally a punishment? If you ask for punishment, it can be punished. That's obvious, but what does it mean that it hasn't changed? So, explicitly stating that they do not punish in cases of crimes between parents and children, spouses, and relatives living together. However, in other family relationships, if you don't request punishment, the state won't intervene. So, if you report it or sue, then it could have been punished, but now it remains unchanged, the same. Yes, that's correct. There must be a reason why the concept has changed. Yes, in the past, crimes involving property between relatives were not punished.

It was actually a matter that should be resolved within the family relationship. Now, respect the fact that the family should prioritize resolving it. So, if a child really touches their parents' wallet, it's too much for the police to take them away and punish them. The idea of handling this within the household was established in a law made 71 years ago. At that time, people lived closely with relatives and it was common to manage property jointly among siblings or parents. Therefore, it was considered reasonable to resolve issues within the family. However, over time, the concept and perception of family have changed a lot. That's why there has been continuous criticism that the law needs to be revised. But this time, the Constitutional Court accepted that. If things proceed this way, it could significantly infringe on the rights of the victims, so some parts need to be revised.

Recently, there was a famous celebrity who became involved in a property-related crime issue within the athlete's family. Every time such incidents occur, it becomes crucial to determine whether the case falls under the category of kinship relationships, as this can significantly impact who will be subject to punishment. Therefore, decisions have been made stating that the law does not intervene based on kinship relationships, even if someone appeals to the law. So, it seems like they are saying, You have to deal with it among yourselves; it's not up to the law. Thus, even when a victim presses charges, the kinship relationship principle does not apply. For example, if a father stole from his son, requesting punishment for theft would not be possible, and the charges would have to be based on other offenses. This issue raises questions about whether it aligns with the sentiments of our country's legal system, but it ultimately pertains to economic matters within families.

Activities are really different in each country. I asked someone from the Arab region how they live, and they said, If you inherit land from your father, you build a two-story house there. As the grandchildren grow up, the older brother, younger brother, and everyone live together on one floor. Then, they build another floor and live like that. In their case, the property is shared among the family, and if there is a dispute, they resolve it according to established family rules. In our country, since the older brother, younger brother, and the third brother all live in the same house, on payday, the second and third brothers just give their earnings to the older brother. Then the older brother looks at it and says, The fourth house doesn't seem to be doing well these days, so let's give some to the fourth house, and give some to the second house, and that's how it's decided.

There must be rules. Just because someone is an older brother, it doesn't mean they have the right to manage family property jointly. Currently, there is a customary law regarding family relationships, but as the composition of families in our country has changed and perceptions have evolved, a decision has been made to amend the law. Even those who may not have known about this law before, now there are quite a few. So, how will it change? If this is immediately abolished, it could cause confusion. For example, if a child touches their parents' wallet and the police find out about it, they could be arrested and punished. Therefore, it was simply said to amend this law. The law must be amended by the end of this year, and if it is not amended, it will be abolished. It probably won't completely disappear, and this recent constitutional decision is about parents and children living together.

Even within the family, if you file a lawsuit, you can hold them accountable for their crime. I think it may change to that extent. So, if you don't file a lawsuit, even if you see it right next to the police, they cannot be punished, right? In the past, even if you filed a lawsuit, it didn't work, but now, if you do, it is considered a crime from that time onwards. The likelihood of it changing like that is high. I see. Thank you.

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