They got overtaken by Germany a country with 50% lower population and the gap is widening. Their gdp per capita is below some Eastern European countries and way below other developed countries that used to have similar gdp per capita. Yen’s devaluation is getting faster so in the future I don’t think Japan can even be called a first world country anymore. What exactly caused this? I know Japan has been in recession since the early 90s but this last few years seem to be extra harsh on Japan
In: Economics
The yen devalued almost 50% in a short span of 5 years. If you use gdp per capita it’s going to look pretty bad as that’s usually in USD.
This drop in JPY is much more recent. Japan may have had near zero growth due to the housing bubble bursting in the 90s, but it wouldn’t lead to this sharp drop.
No, what you’re seeing is the result of a largw interest rate difference between USD and JPY. Everyone’s doing carry trades to benefit from the near zero JPY interest rates. Domestic investors are also selling JPY to invest in other foreign securities.
Once the bank of Japan decides to intervene in the currency market + raise rates continuously, the lights come on and we’ll see it return to normal. When that is is anyone’s guess. They have a tendency to intervene on big US holidays 😉
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