The Japanese yen is under pressure today as they Bank of Japan (BOJ) maintains its zero-interest-rate policy (ZIRP), setting it apart from other central banks that have been tightening or plateauing their rates. Despite rising global inflation, the BOJ has stayed committed to ultra-accommodative policies to support Japan’s economic recovery, which has created a stark divergence between the yen and other major currencies, like the U.S. dollar.
This policy difference has led to a weaker yen, making Japanese exports more attractive but increasing import costs, adding to domestic inflation concerns. Market analysts suggest that unless the BOJ signals any shift toward tightening, the yen may continue to face downward pressure relative to currencies supported by higher interest rates, such as the USD .
