Japan's Yen Weakening Triggers Investor Warnings

The Japanese yen has slid to around 162 per dollar, its weakest level since December 1986, despite the Bank of Japan raising policy rates to a 31‑year high of 1 % and Japanese government‑bond yields jumping to 2.8 %, the highest since 1996. Investors are increasingly bearish, with hedge funds posting their largest short‑yen positions since 2007 and Bank of America noting it could not meet a single yen‑bull in recent client meetings.

Prominent investor Jim Rogers warned that any depreciation of the yen, regardless of the reason, is undesirable. He highlighted that while exporters may profit from a cheap yen, consumers face rising import prices and stagnant wages, eroding real purchasing power. The divergence between a stock‑market rally and falling real wages underscores broader concerns about Japan’s economic outlook.