Japanese Yen Plunges to Weakest Level Since 1986 Despite BOJ Policy Shift

The Japanese yen has plunged to fresh multi-decade lows, touching 161.95 against the US dollar—the weakest level since December 1986—despite the Bank of Japan's shift away from ultra-easy monetary policy and rising domestic bond yields. This continued heavy pressure on the yen, which has weakened 13.25% over the past year, signals that the BOJ's tightening efforts have failed to restore market confidence in the currency. The depreciation significantly affects Japanese importers facing higher costs, consumers dealing with reduced purchasing power, and international tourists who now find travel to Japan more affordable. With the exchange rate falling to 162.43 in early July 2026, the yen's instability poses broader risks to Japan's economic outlook and global currency markets.