Japan faces impact of weak yen

The weak value of the Japanese yen, which has lost a third of its worth against the euro over the past five years, has significantly increased living costs for the middle class in Japan, while making tourism noticeably cheaper for foreign visitors, especially those paying in euros. Japan, in conjunction with the United States, has attempted to strengthen the yen through interventions in the foreign exchange market, the most recent of which was two weeks ago, but these efforts have not resulted in lasting stability. The depreciation of the yen is attributed to monetary easing policies associated with former Prime Minister Shinzo Abe, who adopted zero interest rates to stimulate the economy. However, these measures failed to raise wages or achieve sustainable economic growth due to an aging population and high debt levels exceeding 200% of GDP. Despite the Bank of Japan's attempts to increase interest rates, doing so could harm small and medium-sized enterprises that rely on low-cost loans, highlighting significant economic challenges Japan faces in restoring the value of its currency and attaining sustainable economic stability.

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