The Japanese Yen: When Monetary Normalisation Wasn’t Enough
Before We Begin The Japanese yen has undergone one of the largest and most persistent depreciations of any major currency in the post-Bretton Woods era. Since the beginning of 2021, USD/JPY has risen from roughly 103 to a 40-year high of 163.86, equivalent to a depreciation of approximately 37% against the US dollar. During the same period, the Bank of Japan increased its policy rate from –0.10% to 1.00%, its highest level since 1995, ended negative interest rates, abandoned Yield Curve Control and began withdrawing from one of the most accommodative monetary regimes in modern history. Yet the currency continued…