Archive · 24 Jul 2026
Yen Hits Record Lows in Trade-Weighted Gauge
The yen, Japan's currency, has been getting weaker not just against the dollar but also against other important currencies like the euro and sterling.
This is causing problems because it makes imports more expensive, which can lead to higher prices for goods in Japan.
The Bank of Japan has been trying to manage this by raising interest rates and even spending a lot of money to support the yen, but it hasn't been very successful so far.
Experts are worried and think more drastic measures might be needed to stabilize the yen and protect Japan's economy.
The yen has hit record lows in a trade-weighted gauge, reflecting broad-based weakness.
The Bank of Japan's nominal effective exchange rate index shows the yen's decline against multiple currencies.
A weaker yen increases the cost of imports, complicating the Bank of Japan's monetary policy.
Authorities have intervened in foreign-exchange markets, spending ¥11.73 trillion, but the yen continues to slide.
The yen's weakness is driven by interest rate differentials, oil prices, and fiscal concerns.
- Who
- Bank of Japan, Japanese authorities, Ugo Lancioni (Neuberger Berman)
- What
- Yen's broad-based weakness against multiple currencies.
- When
- Record lows this year, with significant intervention in April-May.
- Where
- Japan, global foreign exchange markets.
- Why
- Wide interest rate differentials, elevated oil prices, and concerns over Japan's fiscal outlook.
Market Intervention Supporters
Market Intervention Skeptics
Effectiveness of Market Intervention
Market Intervention Supporters
Market intervention is necessary to stabilize the yen and mitigate imported inflation.
Market Intervention Skeptics
Market intervention has proven ineffective, and other measures should be considered.
- Nominal Effective Exchange Rate Index
- Measures the yen against a trade-weighted basket of currencies.
- Yen's Weakness
- Extended slide to fresh record lows this year.
- Bank of Japan's Benchmark Rate
- Raised to 1% in June, the highest in 31 years.
- Market Intervention
- Authorities spent ¥11.73 trillion ($71.9 billion) between April 28 and May 27.
- Yen's Lowest Level
- Beyond 163 per dollar, the lowest since 1986.