The yen weakened to levels in the ¥151 range in late October last year, its lowest level in 32 years, but moved toward the ¥130 range in December. The outlook for the dollar-yen exchange rate was examined together with experts' views.
Last year's yen depreciation drove up the prices of everyday necessities. At アキダイ, lemon prices rose to around ¥70 for domestic lemons and approximately ¥98 for imported lemons. The reversal in prices between imported and domestic beef was also noted, with observers pointing to fluctuations in the exchange rate as affecting price levels.
Although the yen is currently expected to move toward appreciation, many believe that substantial changes in price levels will take time, with some saying the effects will emerge six months from now. Following the Bank of Japan's announcement of an adjustment to its monetary easing policy, the market is focused on the outlook for the Japan-US interest rate differential.
Views are divided between those expecting yen appreciation and those expecting yen depreciation. Kiuchi Takahide (木内登英) expects the yen to have a year of sharp movements and sees it heading from the upper ¥110 range toward around ¥120. By contrast, Karakama Daisuke (唐鎌大輔) of Mizuho Bank expects the yen to turn weaker from around midyear, pointing to the structurally large trade deficit as a factor driving yen depreciation.
The possibility of increased carry trading has also been raised, along with the view that a return to the ¥140 range is entirely possible. The outlook for the exchange rate remains uncertain, and experts' views are divided.