Bank of Japan policy delays push USD/JPY toward 1990 highs

Japanese consumer purchasing power is decreasing as the cost of imported energy and food rises. The currency pressure stems from the Bank of Japan's delay in normalizing monetary policy, which has widened the interest rate differential between the U.S. and Japan. The U.S.-Japan 10-year government bond yield spread is currently near multi-decade highs, making dollar-denominated assets more attractive to global investors. This gap drives capital flows out of Japan into higher-yielding markets and encourages carry trade activity, where investors borrow in low-yielding yen to invest elsewhere. This sustained selling pressure has pushed the USD/JPY currency pair toward the 155.00 level, its highest point since 1990.