Why is the yen still so weak?

Jan 29th 2026|5 min read

IF ONE BELIEF unites Japan-watchers, it is that its economy is abnormal. The country is home to world-class firms but clocks little economic growth to speak of. Its net public debt to GDP of 130% is among the world’s highest but its interest rates are among the lowest. And even as the Bank of Japan (BoJ) has raised them from -0.1% to 0.75% over the past two years, which ought to lure return-hungry capital and strengthen the currency, the yen looks nearly as limp as in mid-2024, when it hit a 38-year low. On a trade-weighted basis and adjusting for inflation, it is among the world’s limpest, notes Robin Brooks of the Brookings Institution, a think-tank. So limp, in fact, that rumours swirl of Japan and America considering a joint intervention to prop it up.