How the Strong US Dollar Has Affected Japan Inflation

How the Strong US Dollar Has Affected Japan Inflation

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How the Strong US Dollar Has Affected Japan Inflation
Currently, the value of the Japanese yen has been decreasing as the United States (US) dollar continues to strengthen. For a long period, the Japanese yen has not been in the position it is today, which is something that Japanese investors are afraid of since it is bad for their domestic investment. About a year ago, $1 was equivalent to around 110 Japanese yens. Today, $1 can purchase about 148 yens, which is over a 30% increase in value for the US dollar (Choe, 2022). The strengthening of the US dollar will cause inflation in Japan since the Japanese yen is losing its value.
The value of the US dollar has been steadily increasing, weakening the value of the Japanese yen. The only explanation that suits this phenomenon is that the economy of the US is better than that of Japan (Choe, 2022). Besides, all countries are now recovering from the adverse effects of the COVID-19 pandemic that almost brought the global economy to its knees. Coronavirus disrupted economic activities since numerous businesses halted their