Yen's Weakness Spells Trouble for Japan's Economy and Consumers

The Japanese yen has been trading at historically low levels against major peers, with significant ground lost against the US dollar. As of early 2025, the yen's weakness is making imported goods more expensive for locals while making Japanese products and services cheaper for foreign visitors.

Nordea, a financial institution, highlighted this phenomenon by drawing an unusual parallel to the affordability of burgers in Japan. The bank noted that the yen's undervaluation makes Big Macs cheaper in dollar terms than in the US, reflecting the currency's weakness.

The weak yen has both positive and negative effects on consumers and businesses. For Japanese households, it increases the cost of imported energy and food, squeezing real incomes. On the other hand, exporters and the tourism sector benefit from increased competitiveness.