Not an economic expert by any means, but I think you said it yourself: “no end in sight”.
US interest rates will eventually start coming down but it’ll be a slow process over years; Japan isn’t going to wreck its domestic economy by raising its own interest rates to match.
Japan seems to be willing to intervene in currency markets to stave off any moves beyond ¥150 to the dollar, but there’s no reason to believe things will start moving in the other direction any time soon. IMO people should start getting used to this as the new economic “normal”, at least for the next few years, and adjusting their financial plans accordingly.
What is normal?
I’m forecasting this in the new normal and that the yen will likely slip more.
US is already hinting at further rate increases. Japan is not yet in any real intervention mode.
TBH not for a while.
USA’s 5.25% T bills is too attractive for JP investors which is skewing the demand for USD.
Powell also does not seem keen on reducing the rates this year or even the next year.
Do you see Japan being economically strong in the near future? The US elections next year might shake things up a bit but honestly I would not expect a correction lower than 130 anymore, and I would brace for 150.
There’s an article in Bloomberg today suggesting it’s about to get worse and GS predict it won’t recover any time soon. It might not ever… just like the value of GBP vs EUR or USD, we might be looking at the new normal.
Not great for those of us with plans to invest and relocate away from Japan in the future but better to plan accordingly IMO
This is the new normal, also anyone saying they know what it will do in the future is lying
No one knows but it looks like it will go up to 152 again imho
Never. The government maintains a weak yen policy so that Japanese exporters can cash in when they transfer foreign earnings to Japan.
There’s no such thing as normal. The 120s was normal when I arrived, then 85 was normal, and now 140 is normal. Next year maybe 170 will be normal or maybe something will happen in the US and 120 will be normal again.
Since Japan isn’t raising their interest rates anytime soon we know the change will need to come from the US side. That won’t happen until the Fed is satisfied that they’ve killed inflation or some other economic event spurs them into action.
Define “normal”
It *might* get back to previous levels (or the current level might become the new normal, who knows) when the FED brings back the interest rate to near zero. Buuuut by the looks of it, this might take a couple years to happen, some would argue that we just left the starting block and are not even at half point of the race.
So hmm… buckle up, it’s gonna be a long and bumpy ride!
What I’ve noticed is that the weaker yen has driven housing prices up in major cities. It seems many non permanent resident foreigners are buying up condos, new and used, as second homes or investment properties, since they’re still cheap in their currency. But making them less affordable for residents of Japan to actually own a home in a big city.
Anyone who has any real insight that’s worth anything has long since retired after a few days of FX trading. What’s the point of these questions? There’s plenty of information online explaining the currency trends, you think some random person on this sub will hold some secret answers?
Impossible to say, and unless you have inside information it’s a fools errand trying to time markers, especially currency markets.
Best you can do is hold some money in yen/Japanese domestic stocks, and some in foreign currency/foreign stocks and average out how much you lose on currency fluctuations.
No one really can answer this. It’s an interest rate/policy issue though. If the US ends the rate hike cycle and there is no hard landing then this could go on for quite some time. Recession and decreases in the rates and the yen almost certainly strengthens.
On a personal note, I will probably look to pick up some sort of minor side hustle that pays USD (any suggestions how to do this please let me know!). I have a condo in the US which I swear I am thinking I should sell and transfer the money to Japan at 145JPY. Of course, the flip side is I would have most of my eggs in Japan and have to live with that.
The BOJ head is the dumbest guy in world, instead of rise interest and it gonna affect less than 10% of population they choose instead just leave it and let yen drop affecting 99% of country population
until china dumps treasuries, and we have BRICS currency
No idea. But , I can give you the lottery numbers or all the winners in tomorrow’s horse races.
More likely to go to 200 than it is to go back to 115, at least anytime soon.
I get paid in USD and currencies pegged to the USD, my fingers are crossed it keeps sliding
The first time I lived in Japan the exchange rate was about 120 JPY to 1 USD when I entered and gradually went down to about 77 JPY to 1 USD. That was unreal. I guess this is unreal in its own way. But I am not complaining this time.
No idea but if you can secure some foreign income, now would be a good time.
When the keidanren feels they no longer want easy windfall profit from export.
No one has any idea. No one can predict the future. Anyone that says so shouldn’t be trusted.
Now that said, December 12 2025.
When it becomes advantageous for them to do so.
Japan tends to operate on a protectionist style of economic policy. The weak yen improves exports tremendously, and helps bolster the tourist market. The cost is some inflation, but Japan has been chasing positive inflation for literally decades at this point. The inflation on necessary imports like fuel are being subsidized for many people to take the edge off, and companies are starting to increase pay rates.
To top it off, the last economic report shows great GDP growth for Japan. The trouble with Toyota might cause some weird things to happen in the next week or so, but otherwise, Japan will hold the Yen at this price because they can’t technically slap tarrifs on goods without retaliation.
This has nothing to do with investments and speculative interests, this is purely to do with bolstering Japanese businesses and industry. When people have sizable savings again, Japan will move to make the yen strengthen to push for people to buy or travel abroad, and so on. They have a history of protectionist currency manipulation practices, more so than China or South Korea ever had.
What’s normal tho.
And I hope it stays like this
Search “yen carry trade” and it will explain what is going on. It is normal, US raising rates, Japan not raising rates.
The large global traders with FOREX capability have access to 0% JPY. They can borrow very large amounts of JPY, convert them to USD and invest them at 5.5% short term treasuries and make tons of free money. They have many hedging derivatives (insurance against the exchange rate going upside down for them) to limit any losses if JPY strengthens.
Heads they win, tails you lose. It is program traded free money for those with access to these currency markets.
27 comments
Not an economic expert by any means, but I think you said it yourself: “no end in sight”.
US interest rates will eventually start coming down but it’ll be a slow process over years; Japan isn’t going to wreck its domestic economy by raising its own interest rates to match.
Japan seems to be willing to intervene in currency markets to stave off any moves beyond ¥150 to the dollar, but there’s no reason to believe things will start moving in the other direction any time soon. IMO people should start getting used to this as the new economic “normal”, at least for the next few years, and adjusting their financial plans accordingly.
What is normal?
I’m forecasting this in the new normal and that the yen will likely slip more.
US is already hinting at further rate increases. Japan is not yet in any real intervention mode.
TBH not for a while.
USA’s 5.25% T bills is too attractive for JP investors which is skewing the demand for USD.
Powell also does not seem keen on reducing the rates this year or even the next year.
Do you see Japan being economically strong in the near future? The US elections next year might shake things up a bit but honestly I would not expect a correction lower than 130 anymore, and I would brace for 150.
There’s an article in Bloomberg today suggesting it’s about to get worse and GS predict it won’t recover any time soon. It might not ever… just like the value of GBP vs EUR or USD, we might be looking at the new normal.
Not great for those of us with plans to invest and relocate away from Japan in the future but better to plan accordingly IMO
This is the new normal, also anyone saying they know what it will do in the future is lying
No one knows but it looks like it will go up to 152 again imho
​
https://preview.redd.it/beed8finb0lb1.png?width=1192&format=png&auto=webp&s=6ed71886a8385a94487e14bdb5841b9f84b8ef92
Never. The government maintains a weak yen policy so that Japanese exporters can cash in when they transfer foreign earnings to Japan.
There’s no such thing as normal. The 120s was normal when I arrived, then 85 was normal, and now 140 is normal. Next year maybe 170 will be normal or maybe something will happen in the US and 120 will be normal again.
Since Japan isn’t raising their interest rates anytime soon we know the change will need to come from the US side. That won’t happen until the Fed is satisfied that they’ve killed inflation or some other economic event spurs them into action.
Define “normal”
It *might* get back to previous levels (or the current level might become the new normal, who knows) when the FED brings back the interest rate to near zero. Buuuut by the looks of it, this might take a couple years to happen, some would argue that we just left the starting block and are not even at half point of the race.
So hmm… buckle up, it’s gonna be a long and bumpy ride!
What I’ve noticed is that the weaker yen has driven housing prices up in major cities. It seems many non permanent resident foreigners are buying up condos, new and used, as second homes or investment properties, since they’re still cheap in their currency. But making them less affordable for residents of Japan to actually own a home in a big city.
Anyone who has any real insight that’s worth anything has long since retired after a few days of FX trading. What’s the point of these questions? There’s plenty of information online explaining the currency trends, you think some random person on this sub will hold some secret answers?
Impossible to say, and unless you have inside information it’s a fools errand trying to time markers, especially currency markets.
Best you can do is hold some money in yen/Japanese domestic stocks, and some in foreign currency/foreign stocks and average out how much you lose on currency fluctuations.
No one really can answer this. It’s an interest rate/policy issue though. If the US ends the rate hike cycle and there is no hard landing then this could go on for quite some time. Recession and decreases in the rates and the yen almost certainly strengthens.
On a personal note, I will probably look to pick up some sort of minor side hustle that pays USD (any suggestions how to do this please let me know!). I have a condo in the US which I swear I am thinking I should sell and transfer the money to Japan at 145JPY. Of course, the flip side is I would have most of my eggs in Japan and have to live with that.
The BOJ head is the dumbest guy in world, instead of rise interest and it gonna affect less than 10% of population they choose instead just leave it and let yen drop affecting 99% of country population
until china dumps treasuries, and we have BRICS currency
No idea.
But , I can give you the lottery numbers or all the winners in tomorrow’s horse races.
More likely to go to 200 than it is to go back to 115, at least anytime soon.
I get paid in USD and currencies pegged to the USD, my fingers are crossed it keeps sliding
The first time I lived in Japan the exchange rate was about 120 JPY to 1 USD when I entered and gradually went down to about 77 JPY to 1 USD. That was unreal. I guess this is unreal in its own way. But I am not complaining this time.
No idea but if you can secure some foreign income, now would be a good time.
When the keidanren feels they no longer want easy windfall profit from export.
No one has any idea. No one can predict the future. Anyone that says so shouldn’t be trusted.
Now that said, December 12 2025.
When it becomes advantageous for them to do so.
Japan tends to operate on a protectionist style of economic policy. The weak yen improves exports tremendously, and helps bolster the tourist market. The cost is some inflation, but Japan has been chasing positive inflation for literally decades at this point. The inflation on necessary imports like fuel are being subsidized for many people to take the edge off, and companies are starting to increase pay rates.
To top it off, the last economic report shows great GDP growth for Japan. The trouble with Toyota might cause some weird things to happen in the next week or so, but otherwise, Japan will hold the Yen at this price because they can’t technically slap tarrifs on goods without retaliation.
This has nothing to do with investments and speculative interests, this is purely to do with bolstering Japanese businesses and industry. When people have sizable savings again, Japan will move to make the yen strengthen to push for people to buy or travel abroad, and so on. They have a history of protectionist currency manipulation practices, more so than China or South Korea ever had.
What’s normal tho.
And I hope it stays like this
Search “yen carry trade” and it will explain what is going on. It is normal, US raising rates, Japan not raising rates.
The large global traders with FOREX capability have access to 0% JPY. They can borrow very large amounts of JPY, convert them to USD and invest them at 5.5% short term treasuries and make tons of free money. They have many hedging derivatives (insurance against the exchange rate going upside down for them) to limit any losses if JPY strengthens.
Heads they win, tails you lose. It is program traded free money for those with access to these currency markets.