Japanese yen slides to 40‑year low against the dollar

The yen fell past ¥163 per dollar this week, approaching ¥164, the weakest level since 1986. The drop is driven by a widening U.S.–Japan interest‑rate gap, a stronger greenback and heightened geopolitical tensions that have lifted oil prices and widened Japan’s trade deficit.

Analysts say structural factors – an ageing population, sluggish growth and long‑standing fiscal imbalances – have eroded the yen’s safe‑haven appeal. Although Japan’s Ministry of Finance has intervened repeatedly, spending roughly $215 billion since 2022, the measures have only provided temporary relief.

The currency’s weakness is expected to persist as both the Bank of Japan and the U.S. Federal Reserve are likely to keep interest rates high through year‑end, while oil‑price volatility and Middle‑East supply risks remain.