There’s a New Mr. Yen in Town
The Japanese currency’s prolonged slide has led to a revelation that shouldn’t be a shock: The Fed’s Jerome Powell is in charge.
Sovereignty is relative, especially when it comes to the yen.
Photographer: Samuel Corum/Bloomberg
Jerome Powell is Mr. Yen. He has been for some time, but it has taken a while for the world to catch on.
This is a simplified version of the narrative that emerged after the Japanese currency fell through another big round number — this one being 160 per dollar. You would think Japan has no agency and that something that should have been apparent all year has suddenly come into view: The biggest driver of the yen’s depreciation in 2024 is the yawning gap in interest rates between Japan and the US. Even stray yen bulls stake much on the Federal Reserve, which Powell leads, reducing borrowing costs later this year.