The yen has lost around 20% against the dollar since the end of 2021, underperforming other major currencies. Japan’s central bank kept its ultralow interest rates while most of its peers have been raising rates aggressively. The yen has risen around 7% against the dollar since mid-November partly as traders expect the BOJ to give up its negative interest rate policy sometime in 2024. Yet one of the biggest supports for the yen in 2024 will likely come from the Federal Reserve. Japan stayed put when every other major central bank was raising interest rates, betting it could withstand negative pressure on the yen.

Source: Wall Street Journal December 28, 2023 12:33 UTC