The Japanese yen fell to approximately ¥162 per U.S. dollar in mid-July 2024, marking a historic depreciation not seen in about 39.5 years [1, 2, 3].
This currency slide increases the cost of imported goods, directly impacting the cost of living for Japanese citizens through spikes in food and energy prices.
In the New York foreign-exchange market, the exchange rate reached 161.81 [1]. Other reports indicated the rate briefly hit 162 [2]. This level of depreciation is the lowest seen in approximately 39 to 39.5 years [1, 3].
The decline is driven by a strong U.S. dollar, fueled by expectations of further Federal Reserve rate hikes and rising global inflation [4]. These macroeconomic pressures have trickled down to domestic consumers. From July 2024 onward, more than 2,500 food items saw price increases [2].
Japan's government and the Bank of Japan previously attempted to stabilize the currency, intervening in the foreign-exchange market with over ¥11 trillion earlier in the year [5]. Despite these efforts, the yen continued to struggle against the dollar.
Finance Minister Shun'ichi Katayama said the government would take "decisive measures" [5].
The economic strain is highlighted by personal records, such as a household ledger kept by a housewife for 66 years [2]. The ledger serves as a historical benchmark, showing how current price hikes compare to previous decades of spending.
“The Japanese yen fell to approximately ¥162 per US dollar”
The yen's descent to a nearly 40-year low reflects a widening gap between U.S. and Japanese monetary policies. While the Bank of Japan has attempted massive interventions, the persistence of high U.S. interest rates makes the dollar more attractive to investors. For the average Japanese household, this translates into 'cost-push inflation,' where the rising cost of imports forces a decline in real wages and purchasing power.
