How much has the Japanese Yen depreciated?

The Surprising Weakness of the Japanese Yen

Several months back, I sparked some surprise by highlighting that, when adjusted for real effectiveness, the Japanese Yen is currently as feeble as the Turkish Lira. This comparison is startling, especially considering Turkey’s well-known struggles with central bank autonomy and the resulting collapse of its currency. Unfortunately, there are some clear similarities emerging in Japan’s situation.

For instance, in March 2021, President Erdogan dismissed Turkey’s central bank governor in pursuit of lower interest rates, which led to a series of rate reductions and a dramatic plunge in the Lira’s value. While Japan has not experienced such an extreme scenario, its enormous national debt raises concerns about potential vulnerabilities.