The Japanese yen fell to its 24-year low since August 1998 at 144.35 against the US dollar, which increased the cost of imports. The new rhetorical cautions from the Japanese authorities were prompted by the rapid decline in the value of the yen. Meanwhile, experts warned that the devaluation of the yen could increase Japan’s core inflation to 3% by the end of 2022, reducing the purchasing power of families. The inflation rate in Japan increased steeply in 2022 over that in 2021, according to GlobalData.
The worst is still to come for the Japanese yen. It is predicted that the yen could fall even more in the days to come. A declining yen, however, is not always a bad thing; it could even make Japanese businesses more competitive. As more businesses are keen on increasing imports from Japan, global supply chains are expected to change in Japan’s favor. The total imports of Japan increased significantly during 2017–22, according to GlobalData.
Unlike the US, after several years of deflation, the Bank of Japan (BoJ) adopted a dovish posture on monetary policy in contrast to the US Federal Reserve, which has been raising interest rates more aggressively to contain inflation. The yen would lose value due to inflation since it would have less purchasing power.
Don’t wait - discover a universe of connected data & insights with your next search. Browse over 28M data points across 22 industries.
Access more premium companies when you subscribe to Explorer