Yen's Downward Spiral: Interest Rates and Interventions

The Japanese yen has been experiencing a long-term decline, largely driven by near-zero interest rates that have turned it into the world's cheapest source of funding.

In late July, the U.S. joined Japan in a historic intervention to strengthen the yen, but it is again losing ground.

The yen traded at around 163 per dollar on July 29 before strengthening about 5% to touch 155 following the intervention on July 31.

By August 18, it had weakened 2.5% to around 159 per dollar, leaving the currency close to its weakest levels of the floating era.