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)||105.3||119.7||120.3||116.9||112.7|
5 years of economic forecasts for more than 30 economic indicators.
Japan Exchange Rate Chart
Source: Thomson Reuters
|Bond Yield||0.01||-4.41 %||Jan 16|
|Exchange Rate||109.1||-0.35 %||Jan 16|
|Stock Market||20,443||0.40 %||Jan 16|
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January 18, 2019
The core consumer price index fell 0.1% in month-on-month seasonally-adjusted terms in December, contrasting November’s flat reading. Core inflation fell from November’s 0.9% to 0.7% in December, the lowest reading in seven months.
January 18, 2019
Industrial production fell 1.0% on a month-on-month and seasonally-adjusted basis in November (previously reported: -1.1% month-on-month), contrasting October’s 2.9% expansion. On an annual basis, industrial output rose 1.5% in November, following the 4.2% increase logged in October.
January 16, 2019
Core machinery orders, a leading indicator for capital spending over a three- to six-month period, stalled in November, suggesting that firms may trim capital expenditure in the coming months.
January 8, 2019
Consumer sentiment fell from 42.9 in November to 42.7 in December, marking the lowest reading since December 2016.
December 21, 2018
The core consumer price index was stable in month-on-month seasonally-adjusted terms in November, down from October’s 0.2% increase. Core inflation inched down to 0.9% in November compared to October’s 1.0%, missing analysts’ expectations of 1.0%.