In Japan, the spectacular fall of the yen penalizes businesses and the population

Posted Apr 20, 2022, 7:46 AMUpdated on Apr 20, 2022, 10:27 AM

When the yen reached its lowest level in 20 years last week and passed the symbolic threshold of 125 yen against the dollar, analysts predicted that the Japanese currency could fall to 130 yen against the greenback at the end of 2022. But their predictions could turn out to be correct much sooner. This Wednesday, in Tokyo, the dollar reached, for a few minutes, 129 yen, which represents a loss of value of 12% of the Japanese currency since the beginning of the war in Ukraine.

In Japan, the unusual pace of this fall is beginning to panic the authorities and economic players. For decades, the Conservative government had supported the weak yen strategy, convinced that it would help its companies to boost their exports, but this theory is outdated and the depreciation of the yen is proving to be a handicap for the Japanese economy. “It’s a bad decline in the yen,” Finance Minister Shunichi Suzuki has just acknowledged.

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