Yen Slides to 39‑Year Low as Dollar Demand Rises, Raising Household Costs in Japan

The Japanese yen fell to around ¥161.80 per dollar on 18 May, its weakest level in roughly 39 years. Strong demand for dollars, driven by robust U.S. employment data and a hawkish stance from the Federal Reserve under new chair Jerome Powell, has pushed the yen lower despite easing geopolitical tensions.

At the same time, Japanese consumer prices are climbing, especially for meat products. Pork, beef and chicken prices have risen by 2‑4.6 % in May, causing the cost of a typical pork cutlet meal to increase by 3.8 %. The higher import‑price pressure, combined with a weaker yen, is tightening household budgets.

Japan’s finance minister, Shunichi Katayama, warned that speculative moves could trigger decisive intervention, and the Bank of Japan’s deputy governor signaled possible further rate hikes. Market participants remain watchful of upcoming U.S. personal consumption data, which could reinforce expectations of additional Fed tightening and further dollar buying.