Yen's Real Effective Rate Falls Below 1970, and Japan Calls It a Funeral

Why This Topic Landed in Japan

The Bank for International Settlements' real effective exchange rate (REER) is a composite that compares one currency's strength against a basket of trading partners, weighted by trade volume and adjusted for inflation. In March 2026 Japan's reading hit 66.33, below the roughly 75 level recorded when the index began in 1970 — meaning the yen is now structurally "weaker" than during the 360-yen-per-dollar fixed-rate era. Japanese readers are already living with imported food and energy inflation, sharp tourism-driven price asymmetries, and ongoing low rates, so the headline didn't read as new news. It read as a number that finally caught up to the lived reality.

Key Reaction Themes

• Structural-decline framing — Comments highlighted long-term drivers — aging demographics, low rates, a long stagnation in domestic prices and growth — rather than blaming any single recent decision.
• Household-pain reading — A recurring quote was that a falling REER raises import prices and squeezes households and small businesses. The number is abstract, but the consequence is rice, fuel, and electricity bills.
• Policy criticism — Commenters surfaced complaints about reflation-aligned appointments to fiscal advisory bodies, the BoJ's reluctance to hike, and policy reversals on rice production, treating the weak yen as a chosen outcome rather than an accident.
• Asymmetric winners — Some calmly noted that this same currency weakness benefits exporters, large corporates, and inbound tourism — Japan is being "discounted" for outsiders while residents pay more.
• Generational defeatism — A subset of comments expressed shock that things had fallen this far in their own lifetime, treating the BIS chart as an obituary for the postwar economic project.

What Japanese Netizens Are Saying

• "The yen's value just keeps collapsing. Per the Bank for International Settlements,"
• "the real effective rate isn't the same thing as the dollar-yen quote — it measures relative strength against a basket of currencies, and goes up when your inflation runs higher than others'. The yen's REER hit a peak in 1995 at roughly 3x today's level."
• "After that peak, decline tracked Japan's long economic and price stagnation. Low rates accelerated yen depreciation against the dollar and euro."
• "When the index began in 1970, the rate was around 75. The fixed rate then was 360 yen to the dollar, and we're now below that as a measure of real purchasing power."
• "BIS calculates this from about 65 economies' rates, trade volumes and inflation. A drop pushes import prices up and burdens households and firms — but discounts Japan for foreign tourists and helps export competitiveness."
• "Even after this kind of inflation, the government still says we 'haven't escaped deflation.'"
• "They put reflationists — i.e. inflation-pushers — on the Council on Economic and Fiscal Policy."
• "On rice prices, Ishiba/Shinjiro reversed their own boost-supply, lower-prices line and went back to acreage cuts and price hikes."
• "Weak-yen winners are happy. Weak yen makes inflation worse."
• "And the BoJ is still being told not to hike rates."
• "Big firms, exporters, and the tourism industry come out ahead."
• "Households, domestic-demand firms, import-dependent industries, and SMEs lose."
• "Net effect on the Japanese economy as a whole: slightly negative."