Japan appears to be facing an extended period of low growth and a weak yen as the U.S. Federal Reserve continues its aggressive monetary tightening amid soaring inflation.
The government hopes a massive economic stimulus package with total fiscal spending worth ¥39 trillion ($264 billion) unveiled last month will underpin the economy at a time when higher energy, raw material and food prices are threatening to derail a recovery from the COVID-19 pandemic. Many economists, however, are skeptical that the package will boost the world's third-largest economy.
Intense yen-selling pressure appears to be easing in recent days, with the yen trading in the ¥145-¥149 range against the U.S. dollar, partly because of persistent caution about yen-buying interventions by Japanese authorities as officials warn against excess volatility.