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Japanese yen tumbles to 40‑year low despite authorities’ interventions
On June 29, the Japanese yen fell to its weakest level since 1986 — 161.97 yen to the dollar — decisively breaching the key psychological 160‑yen barrier. Bloomberg reports that the rapid currency weakening is having a twofold effect on the economy. On the one hand, the depreciation is materially boosting the net profits of Japan’s largest exporters, a development that has already pushed the local stock market to record highs. On the other hand, import bills for scarce commodities such as oil and gas have surged, inflicting a painful burden on domestic consumers forced to pay more for basic resources.
Notably, the yen’s decline has continued despite dramatic shifts in the Bank of Japan’s monetary policy. A change in the regulator’s leadership and the formal abandonment of years of negative interest rates should have supported the currency. However, the yen has continued to weaken even after the recent rate rise to its highest level since 1995. The currency also largely ignored unprecedented interventions by financial authorities, who spent a record 11.73 trillion yen (about $73.6 billion) supporting the exchange rate from April 28 to May 27. Tokyo’s earlier intervention only briefly corrected the rate to about 155 yen to the dollar, after which the downtrend resumed.
Against the backdrop of the protracted currency rally, Finance Minister Satsuki Katayama held emergency talks with her US counterpart Scott Bessent, during which the parties may have discussed parameters of a new coordinated intervention. Despite Katayama’s repeated warnings that authorities stand ready to take the toughest and most decisive measures against market speculators, the situation has not yet been corrected. Analysts agree that beyond the prolonged Middle East conflict, Japan’s chronic structural problems — rapid population aging and decline — are exerting strong pressure on the currency’s trajectory by undermining long‑term growth prospects and contributing to an uncontrolled rise in public debt.
Published 02 July 2026
© InstaFintech Group
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© InstaFintech Group
