Japanese Yen - Why The Yen is Fundamentally Weak

The Japanese Yen is fundamentally weak as low inflation in Japan is causing the Bank of Japan to keep interest rates low, at a time when other central banks in the U.S, Canada, Australia, New Zealand and the UK are raising rates to deal with high inflation in their domestic economies.

The interest rate differentials and divergence in monetary policy are forcing Japanese Investors to sell the Yen in exchange for currencies that pay a premium interest rate on Government and corporate bonds.