The yen has returned to the ¥160-per-dollar range. Japan conducted approximately ¥15.3993 trillion in yen-buying, dollar-selling intervention from late July through late August, including coordinated intervention with the United States, but the yen's weakening trend has continued. The tourism and shopping industries are reportedly seeing expanding demand as yen depreciation against the won increases the number of visitors to Japan.
Over a period of approximately one month, the Japanese government conducted yen-buying, dollar-selling intervention on an unprecedented scale. The total includes last month's coordinated intervention with the United States, bringing cumulative intervention above ¥27 trillion, far exceeding the largest annual total in 2024, but the measures have failed to halt the yen's decline. Japan's Ministry of Finance disclosed the intervention amount for the period from 30 July to 26 August. With US intervention also included, the yen moved into the ¥155-per-dollar range immediately after the coordinated intervention, but returned to the ¥160 range amid hawkish remarks from the Federal Reserve.
Yen depreciation is said to drive up electricity and gas bills, gasoline prices and food prices by increasing the cost of importing crude oil, liquefied natural gas, grains and other goods, affecting households and importing companies. The Bank of Japan has pointed out that yen depreciation raises wages at large export companies while putting downward pressure on small and medium-sized companies. Reports have also said that prices for some major defense equipment have risen above plan, with expansionary fiscal policy cited as a factor behind the yen's weakness.
Meanwhile, the tourism and shopping industries have welcomed the yen's weakness. The yen-won exchange rate had fallen to around KRW 862 per ¥100 as of the 30th, after reaching KRW 859 on the 28th. South Korean tourists visiting Shibuya said shopping in Japan was inexpensive, while reports also described heavy bookings at upscale restaurants in Ginza.