I was collecting Bikkuriman 39 years ago

"1 dollar = 161 yen upper range"

Right now, the value of Japan's currency, the yen, is approaching its lowest level in about39 years since 1986.

It’s been reported in the news daily, but to answer questions like "Honestly, why is the yen weakening so much?" and "What will happen next?", here is an explanation in three points without heavy technical terms.

? Point 1: Why has the yen weakened this much?

The reason can be summarized in one word: the interest rate gap between Japan and the United States.

United States: economy is strong, rate hikes are anticipated (holding dollars earns a lot of interest)

Japan: rates remain low (holding yen earns almost no interest)

Investors and traders around the world move to sell the "yen" that earns no interest and buy the "dollar" that earns a lot of interest. Since this huge flow doesn’t stop, the value of the dollar keeps rising and the yen’s value keeps falling.

? Point 2: How remarkable is "39 years"?

The current target level is the wall of "1 dollar = 161.95 yen" reached in July 2024.

If we go beyond this to the 162 yen range, it will be a historical level dating back to 1986 (Showa 61).

1986 was the time when the Bubble economy was just beginning. We are currently witnessing a historic level since then.

? Point 3: Upcoming events and "government intervention"

To prevent further yen depreciation (rising prices), attention is on whether Japan’s government and the Bank of Japan will carry out "yen-buying intervention" (a countermeasure to forcibly buy yen and stop the yen's weakness).

In the past, when the yen exceeded 160 yen, huge sums were used for intervention, and the market remains on edge, constantly wary of when the government will move.

? How does this affect our lives and trading?

Impact on daily life: imports from abroad for energy and food, as well as gadgets like iPhones, may rise in price even more.

Impact on trading: despite the strong yen weakness, the area just before 162 yen is where government intervention is most anticipated. There is also a risk of sudden sharp declines (rapid yen appreciation), so price movements remain extremely sensitive.

We are at a historic turning point in the dollar-yen market. Whether the trend accelerates from here or the government's defense measures bite back, this is truly the moment of maximum critical test.