How far will the yen depreciation progress?
The background of the large depreciation of the yen at the feet is based on a certain consensus in the market. (A) The pace of U.S. interest rate hikes is faster than Japan's, and the interest rate differential between Japan and the United States is expected to widen,
(B) With rising energy prices, Japan's import amount increases (even if the import volume does not change), which means there will be higher demand for dollars.
Regarding (B),As stated in the March 27, 2022 article Japan's trade balance indicates an astonishing yen depreciationas noted.
Let's look at (A) from a long-term perspective.
× ![]()