The sharp depreciation of the yen is mainly due to three reasons

The sharp depreciation of the yen is mainly due to three reasons. Firstly, the United States raised interest rates. Since March, the Fed has begun the cycle of raising interest rates, the US dollar has strengthened sharply, and interest-rate differential between Japan and the US has widened, causing the market to sell yen for dollars and a substantial outflow of capital out of Japan. The second reason is that Japan adheres to a loose monetary policy. Japan's economy has been stagnant over the past 30 years, with an average annual real GDP growth rate of only 0.97%. Since the COVID-19 pandemic in 2020, there has been a serious negative growth. The economy has been repaired by loose monetary policy and fiscal stimulus, which makes the Japanese government too dependent on low interest rate monetary policy. Thirdly, high commodity prices and global economy downturn have led to a rise in the price of imported resources, while demand for exports has shrunk, and Japan has been running a trade deficit for months. This has led to a decline in global capital confidence in the Japanese economy and capital outflows