Japanese Yen at Lowest Level Since 1986

The Japanese yen has reached its lowest level against the dollar since 1986. On the Asian market, the price of one dollar has risen to 162.40 yen, meaning the yen has depreciated the most over the past four decades.

While yen depreciation does help exporting companies increase revenues and has a positive effect on the stock exchange, it simultaneously significantly raises the cost of imported goods and energy resources. In May, a 3.3% price increase was recorded in the services sector, while fuel price increases raised sea freight shipping costs by 61.8% and international flight prices by 17.3%.

The Japanese government spent 11.73 trillion yen in April and May to support the yen, but was unable to stop the currency's decline. According to analysts' assessments, downward pressure on the yen will persist, as the interest rate differential between Japan and the US is significant. Due to higher rates, it is more profitable for investors to invest money in dollars, which further weakens the yen's position.

Source: Investing.com