Yen Weakness Continues as Trade Deficit and Record Import Bill Pile Pressure

The Japanese Yen has been struggling to recover from its recent lows as a widening trade deficit and record import bill continue to put pressure on the currency.

According to the latest data, Japan's exports rose by 23.2% in July compared to the same period last year, but imports increased even stronger at 27.8%, resulting in a trade deficit of ¥634.5 billion.

The record import bill was driven by higher energy costs due to disruptions in the Strait of Hormuz, which has pushed up the cost of purchasing oil and other essential goods.

Experts warn that a weak currency is damaging the economy by increasing import costs, with former top Japanese currency diplomat Mitsuhiro Furusawa stating that intervention alone cannot deliver a durable solution.