Yen’s Real Effective Exchange Rate Falls to Record Low
- Data underscore pressure on the BOJ to normalize policy
- Gauge measures the yen’s value adjusted for inflation
Passengers at Tokyo Station.
Photographer: Shoko Takayasu/BloombergThis article is for subscribers only.
The value of the yen has slumped to the lowest on record, as measured against a broad basket of its peers and adjusted for inflation, according to data from the Bank for International Settlements.
The data — which stretch back to 1970 — underscore the pressure on the Bank of Japan to normalize its ultra-easy monetary regime, which continues to weigh down the nation’s interest rates and weaken the currency. The drop in the so-called real effective exchange rate means Japanese have to pay more for imported goods and services at a time when wage growth is failing to compensate for inflation.