The Yen Hit Its Weakest Level Since 1986, Then Bounced Back
On July 1, 2024, the Japanese yen fell to more than 161 per US dollar. That was its weakest level against the dollar since 1986, according to Citigroup's CIO Bulletin.
Then the yen recovered, and quickly. Citigroup's later yen note, dated August 5, 2024, says the yen strengthened against the dollar after July 11. It reached a low of 141.70, down from a high of 161.85. That is a 12.5% drop in the dollar's value, measured from the high. The note uses this method.
The size of a percentage depends on where you start counting, so the same move can sound different depending on the starting point. Going from 161.85 to 141.70 is a 12.5% fall in the dollar's price in yen. Measured the other way, as the change in how many dollars it takes to buy one yen, the yen's gain works out to roughly 14%. If you compare this episode with other currency data, check which starting point the source uses. Citigroup's Asia Pacific strategy note provides the later figures.
For everyday savers and borrowers, the yen's level matters mostly through prices. A weaker yen makes goods priced in dollars more expensive for Japanese buyers. It can also raise the yen value of dollar earnings for Japanese exporters, the companies that sell abroad. A swing of 20 yen in a few weeks changes those sums fast. Households holding dollar assets, or dollar-linked debt measured in yen, saw their positions move by a similar size over the same period.
The 1986 comparison deserves a closer look. The yen had not been weaker than 161 per dollar in almost four decades before July 2024. So the July 1 reading sat outside the range seen since 1986. That is a fact about the historical record. It says nothing about where the yen will go next.
In the broader context, the yen spent much of 2024 near the weak end of its range before its sharp rebound. Traders and the people who manage company money read speed like that as a clue about who holds which bets. A move this size in a major currency pair can leave bets made with borrowed money exposed to being closed out quickly. Still, any single cause given in market commentary from that time is an interpretation, not a settled fact.
In my view, the clearest lesson for investors is how wide the range became. A 20-yen swing in about five weeks is large for a major, widely traded currency. It shows how quickly the value of a dollar-yen holding can flip direction for a portfolio that is not hedged, meaning one without steps taken to protect it from currency moves. Anyone tracking Japanese investments in dollar terms, or Japanese company earnings converted back into yen, should keep 161.85 and 141.70 as the reference range for that period.
