The current environment of the Japanese yen
Over the past few days, the Japanese yen has weakened significantly, reaching a value of 155 for one dollar. This represents a level that has not been seen since July, raising concerns and speculation about a possible intervention by Japan in the currency market. The situation is further complicated by the recent re-election of Donald Trump as President of the United States, which has led to an increase in US Treasury yields, negatively affecting
the Japanese currency.
The causes of the weakening of the yen
One of the main factors contributing to the weakening of the yen is the increase in American government bond yields, especially the biennial one, which reached its highest levels since July. This phenomenon is linked to the expansionary and inflationary economic policy promoted by the Trump administration, which could induce the Federal Reserve to keep interest rates high. As a result, the gap between Japanese and U.S. interest rates could widen further, making the yen less attractive to investors
.
The possible consequences on the global market
The depreciation of the yen has repercussions not only on the Japanese market, but also on the global one. A weak yen may make Japanese exports more competitive, but at the same time it can increase import costs, contributing to domestic inflationary pressure. In addition, uncertainty regarding the stability of the Japanese currency could lead to greater volatility in international financial markets. Investors are closely monitoring the situation, as an intervention by the Japanese government could drastically affect the dynamics of the currency market
.