Japanese Yen: returns since 1971

The Japanese yen is the funding currency of the classic carry trade, and our series tracks the value of one yen in U.S. dollars since 1971. With Japanese interest rates pinned near zero for decades, the yen has ranged from below $0.004 to above $0.013 — a reminder that exchange rates move on rate gaps, not just growth.

One honesty note: this is the exchange rate against the U.S. dollar (FRED H.10), not a return. Holding cash earns no interest, so the line above is currency movement and not a yield, and the comparison against U.S. inflation (CPI) shows what a dollar holder actually kept in real terms.

The yen's modern story turns on a few decisions you can mark on a calendar. The Plaza Accord of September 1985 coordinated a deliberate weakening of the dollar and roughly doubled the yen's value over the following years; the Bank of Japan then cut rates toward zero in the late 1990s and launched quantitative easing in 2001, anchoring the gap that funds the carry trade. After 2022, as other central banks raised rates while Japan held near zero, that gap widened and the yen slid to multi-decade lows, a swing the year-by-year table below traces directly.

Descriptive, educational content computed from official public data. Not investment advice. Past performance does not guarantee future results.