Japanese yen hits 40-year low as structural economic pressure builds

The Japanese yen dropped to its lowest value in 40 years this week, deepening a structural decline that began in 2021 and putting renewed pressure on Tokyo's long-standing economic framework.

Since 1991, Japan has relied heavily on aggressive state spending and low interest rates to sustain economic activity. However, the sharp devaluation of the currency threatens to undermine this decades-old strategy. Economic analysts warn that the currency's rapid slide reflects growing market anxieties over the sustainability of the country's massive public debt burden, especially as global interest rate environments shift.

The prolonged slump challenges long-held assumptions regarding Japan's unique fiscal insulation, signaling potential limits to its long-term monetary policy approach.

Sources: El Mundo