Understanding the Yen's Weakness

The yen's weakness is a topic of discussion due to different perspectives on whether it's a result of yen weakness or dollar strength. While some argue it's yen weakness, others believe it may be influenced by the dollar. The yen's real terms weakness has reached extreme levels back to the 1970s, raising concerns about Japan's economy's underlying strength. The Bank of Japan's monetary policy differs from the policy of the Federal Reserve and the European Central Bank. The debate revolves around the yen's extreme weakness, questioning whether it's a natural consequence of large interest rate differentials or if the yen has overshot, becoming divorced from the support of an interest rate differential.