The article reviews the sequence of events from Black Monday in 1987 through the sharp turn toward yen appreciation in 1998 and the currency-market crash during the 2008 Lehman shock, and discusses current expectations for yen depreciation and the outlook for 2026.
The October 1987 global stock-market sell-off known as Black Monday has made a particularly strong impression against the backdrop of the turmoil that occurred immediately after a change in the Fed chair and West Germany's BUBA refusing to cut interest rates. This raised concerns about the future of international policy coordination and reinforced the image of a market crash.
In foreign exchange, October crashes are also cited as representative examples from the past. In October 1998, the US dollar/yen exchange rate fell approximately ¥25, shifting sharply from the ¥135 range to the ¥110 range. It has been pointed out that the background included factors that caused expectations of yen depreciation to be revised and the trend to turn toward yen appreciation.
There was also a major fall in the Australian dollar/yen exchange rate during the Lehman shock in October 2008. At the time, buying the Australian dollar and selling the yen was popular on expectations of an interest-rate differential, but the trend reversed during the crisis.
More recently, yen selling has been seen against a backdrop of low Japanese interest rates, while it has been noted that movements in cross-yen pairs could become larger, as in past October crash episodes.