Exchange Rate in Japan
Japan - Exchange Rate (average of period)
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 (aop) Data
|Exchange Rate (vs USD, aop)||79.70||79.84||97.63||105.9||121.1|
5 years of economic forecasts for more than 30 economic indicators.
Japan Exchange Rate (aop) Chart
Source: Thomson Reuters
|Bond Yield||0.10||4.40 %||Feb 16|
|Exchange Rate||113.2||-0.81 %||Feb 16|
|Stock Market||19,348||-0.47 %||Feb 16|
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February 13, 2017
Although the economy managed to expand for the fourth consecutive quarter in Q4, growth softened in the October-December period as a result of stagnating private demand.
February 9, 2017
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) rebounded in December and expanded at the fastest pace since June 2016.
February 2, 2017
Consumer sentiment in Japan rose marginally from December’s 43.1 to 43.2 in January, which marked the highest reading since September 2013.
January 31, 2017
Industrial production expanded 0.5% in December compared to the previous month in seasonally-adjusted terms, below November’s 1.5% reading.
January 31, 2017
The Bank of Japan (BoJ) maintained its monetary policy at its 30–31 January meeting, voting to continue with its Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control program as long as is necessary to achieve its 2.0% inflation target.