While USD/JPY's four-decade lows drew headlines, Japan's nominal effective exchange rate — a trade-weighted yen index — has fallen to fresh YTD lows, reflecting weakness versus the euro, pound sterling and several Asian currencies. Broad yen depreciation raises imported inflation (inf) risks and erodes Japanese purchasing power, boosting import costs across multiple trade partners and complicating the Bank of Japan's path to policy normalization without harming the recovery. Robeco senior portfo

While USD/JPY's four-decade lows drew headlines, Japan's nominal effective exchange rate — a trade-weighted yen index — has fallen to fresh YTD lows, reflecting weakness versus the euro, pound sterling and several Asian currencies. Broad yen depreciation raises imported inflation (inf) risks and erodes Japanese purchasing power, boosting import costs across multiple trade partners and complicating the Bank of Japan's path to policy normalization without harming the recovery. Robeco senior portfolio manager Ugo Lancioni said the yen's value is deteriorating against a basket of currencies and may require stronger FX intervention, potentially combined with other measures, to be fully effective.