Why has the yen weakened so much? Policy Rate Differentials and Trade Deficits
This is because both the dollar is strengthening and the yen is weakening. Since the US lifted its zero-interest-rate policy in March 2022 and began raising interest rates, the interest rate differential between the US and Japan has widened and the yen has weakened The timing of the Fed's interest rate cut is far off, with one rate cut or less likely within the year. One long-term factor is Japan's widening trade deficit.