Exchange Rate in Japan
Japan - Exchange Rate
Trump’s victory and Fed’s hike prompt sharp depreciation of yen
The Japanese yen (JPY) has been depreciating sharply against the U.S. dollar since Donald Trump’s victory in the 8 November presidential election and, in particular, following the United States Federal Reserve’s decision to raise its benchmark interest rate at the 13–14 December meeting. On 15 December, the JPY marked the weakest reading since February this year; it traded at JPY 118.2 per USD. This was 8.2% weaker than the level observed on the same day in November. That said, on an annual basis, the Japanese yen still gained 2.9% against the greenback.
The sharp weakening of the yen mostly reflects expectations that Trump’s policies will boost growth in the world’s largest economy via stronger fiscal stimulus and that the Federal Reserve will have to hike rates, thereby widening U.S.–Japanese interest rate differentials. This situation contrasts with the dynamics observed earlier this year, where rising risk aversion due to an uncertain global outlook had led the yen to strengthen to a nearly three-year high.
If sustained, the depreciation of the yen could cause a rebound in exports, translating into an improvement in businesses’ earnings, higher inflation, and stronger investment and manufacturing activity. Nevertheless, Trump’s unclear policy plans will cast a long shadow on the yen’s performance in the coming months.
FocusEconomics Consensus Forecast panelists expect the yen to trade at 117.7 per USD by the end of 2017. For 2018, the panel projects that the yen will weaken to 119.4 per USD.
Japan - Exchange Rate Data
|Exchange Rate (vs USD)||76.96||86.75||105.3||119.7||120.3|
5 years of economic forecasts for more than 30 economic indicators.
Japan Exchange Rate Chart
Source: Thomson Reuters
|Bond Yield||0.05||4.26 %||May 24|
|Exchange Rate||111.5||-0.25 %||May 24|
|Stock Market||19,743||0.66 %||May 24|
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May 26, 2017
In April, the core consumer price index in Japan was flat from the previous month in seasonally-adjusted terms, matching the result in the previous two months.
May 24, 2017
The Nikkei Flash Manufacturing Purchasing Managers’ Index (PMI) fell from April’s revised 52.7 (previously reported: 52.8) to 52.0 in May.
May 22, 2017
Nominal exports in Japan valued in yen increased 7.5% from the same month last year in April, following March’s 12.0% increase.
May 17, 2017
Although core machinery orders (a leading indicator of capital spending over a three- to six-month period) expanded for the second consecutive month in March, they weakened in Q1 compared to Q4 2016, suggesting that businesses investment likely weakened in the three months up to March.
May 16, 2017
Improving domestic demand, coupled with resilient activity in the all-important external sector, propelled growth at the outset of the year.