Japan: Japanese yen weakens but still remains at uncomfortably high level
December 15, 2011
In the last few weeks, the yen has ended its rally and depreciated slightly, but is still hovering around its all-time high. By 15 December, the yen was trading at 77.9 JPY per USD, which represents a 1.2% depreciation versus the US over the previous month. However, on a year-on-year basis, the yen has appreciated a nominal 7.7%. The Japanese currency has appreciated a nominal 5.6% so far this year versus the US dollar, as investors see the yen as a safe haven amid Europe's sovereign debt crisis and global uncertainties. The persistent appreciation of the yen exacerbates exporters' competitive position at a time when they have to cope with the adverse effects of a slowing global economy In order to counteract the strengthening of the yen, the Bank of Japan has already intervened in the foreign exchange market three times this year.