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)||86.75||105.3||119.7||120.3||116.9|
5 years of economic forecasts for more than 30 economic indicators.
Japan Exchange Rate Chart
Source: Thomson Reuters
|Bond Yield||0.04||-4.41 %||Nov 17|
|Exchange Rate||112.1||-0.35 %||Nov 17|
|Stock Market||22,397||0.40 %||Nov 17|
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November 20, 2017
Nominal exports valued in yen increased 14.0% from the same month last year in October, following September’s 14.1% rise.
November 15, 2017
The Japanese economy expanded for the seventh consecutive quarter in Q3, the longest period of growth in more than a decade.
November 9, 2017
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) plunged at their fastest pace in over two years in September, suggesting that capital expenditure is losing momentum.
November 2, 2017
Consumer sentiment rose from 43.9 in September to 44.5 in October, marking the highest level since September 2013.
October 31, 2017
Industrial production fell 1.1% in September compared to the previous month in seasonally-adjusted terms, contrasting August’s 2.0% increase.