On August 12, 2026, Chinese media Observer Network published an article titled "The yen exchange rate is once again approaching 160 yen to the dollar, is there still salvation for the Japanese economy?" and reported that even after the coordinated intervention by Japanese and US authorities, the weak yen has recurred, and there are three structural factors pressing down on the Japanese economy.

The article introduced that after the coordinated intervention in the foreign exchange market by both Japan and the US, the dollar-yen exchange rate temporarily strengthened to around 155 yen to the dollar, but subsequently weakened again to the 159 yen range. As the view of Lian Ping (Lien Ping), who serves as chairman of the China Chief Economist Forum and dean of the International Finance Research Institute, it was conveyed that coordinated intervention merely has the effect of temporarily slowing down the pace of the yen's depreciation, and it is difficult to change the mid- to long-term trend of yen depreciation itself.

Furthermore, it cited the continuous interest rate differential between Japan and the US as a major factor in the yen's depreciation, and pointed out the situation where the Bank of Japan is forced to make small interest rate increases while the US Federal Reserve (FRB) does not embark on interest rate cuts.

Moreover, regarding why Japan cannot embark on significant interest rate hikes, it was explained that there is a risk of further cooling corporate activities and accelerating economic recession. It was also conveyed that from the perspective of maintaining government stability, Japanese authorities are in a situation where they cannot abandon their cautious stance.

Furthermore, it mentioned that the weak yen is causing serious damage to Japan's domestic economy and the daily lives of its citizens. It explained that because Japan relies heavily on imports for many daily necessities and food products, the surge in import costs due to the weak yen is immediately spreading to domestic consumer prices, and domestic consumer spending is declining due to anxiety about future household finances caused by the rapid increase in prices of daily goods.

In addition, it cited geopolitical risks and dependence on trade with China as another issue shaking the Japanese economy. It touched upon the fact that while Japan depends on imports from China for over 70% of its rare earths, and nearly 100% of heavy rare earths, China is strengthening export restrictions on dual-use (military and civilian) goods to Japan due to statements concerning the Taiwan issue and moves to strengthen defense capabilities. It also introduced a calculation by Daiwa Institute of Research stating that if rare earth imports from China were to stop for one year, Japan's GDP could decrease by 1.3% to 3.2%, and employment could decrease by 900,000 to 2.16 million people.

The article concluded that the limits of monetary easing, the decline in domestic demand due to high import prices, and geopolitical risks in the supply chain are converging, leading to a policy impasse for the Japanese government and central bank. It was reported that amid growing concerns both domestically and internationally regarding Japan's economic growth outlook, the mid- to long-term trend of yen depreciation and the risk of economic recession remain a concern. (Edited and translated by Kawajiri)