 is expected on Friday to keep its main rate below zero. And that is bad for its currency. The yen has long been seen as a safe haven, which investors traditionally bought at times of crisis.But that status is now on shaky ground. This year alone it has lost more than a fifth of its value against the US dollar to hit the lowest level since 1990.The yen's slide has been driven by the difference between interest rates in Japan and the US.Since March, the US Federal Reserve has aggressively raised its main interest rate - from 0.25% to 3.25% - as it tries to tackle the rising cost of living.Higher interest rates tend to make a currency more attractive to investors.As a result there is less demand for currencies from countries with lower rates and those currencies fall in value.However, some experts believe the weak yen reflects the state of the country's finances.The economy has hardly grown in the last three decades. It is also the world's most indebted nation.Japan also faced the demographic time bomb of a low birth rate and a population with the highest proportion of older people in the world."There is no reason for the yen to strengthen," says Takeshi Fujimaki, a former adviser to billionaire investor George Soros.He expects the Japanese currency to hit 180 against the US dollar before eventually collapsing in value, as he has previously warned.BOJ governor, Haruhiko Kuroda, has repeatedly said the economy is too weak to handle higher interest rates.Like much of the rest of the world, Japanese consumers are struggling with rising inflation but that has been welcomed by policy makers, who have long wanted prices to rise.Mr Kuroda says the bank's current policy is necessary to){kind=link}
At the end of the last century, Japan became the first major economy to cut interest rates to zero.
During the Covid pandemic, many other nations adopted that tactic to support their economies.
Those countries are raising interest rates again but the Bank of Japan (BOJ) is expected on Friday to keep its main rate below zero. And that is bad for its currency.
The yen has long been seen as a safe haven, which investors traditionally bought at times of crisis.
But that status is now on shaky ground. This year alone it has lost more than a fifth of its value against the US dollar to hit the lowest level since 1990.