Blu Putnam - Unintended Consequences of a Weaker Yen

Inflation Looms as Japan Accelerates Depreciation Effort

Recently-elected Japanese leaders have already started to deliver on campaign promises to depreciate the yen in an effort to boost the country's sluggish economy, as the currency hovers at the weakest levels against the U.S. dollar since mid-2010.

The recent yen softening may be just a prelude to declines to six-year lows and beyond, CME Group Chief Economist Blu Putnam wrote in a new report. On January 10, the yen traded around 88.7 to the dollar, a slide of nearly 14% since the beginning of October.

"From an historical or chartist perspective, in developing scenarios of possible yen moves, one probably should consider yen depreciation taking the exchange rate above 120 per dollar (where it last traded in July 2007), perhaps to 130 (April 2002) or even 140 (August 1998)," Putnam said.

But further yen weakening may carry unintended consequences for the heavily-indebted Japanese government, Putnam cautioned. For starters, depreciation threatens a long-term bull market in Japanese government bonds, leading to greater volatility amid prospects for rising inflation.

Read the Full Report

Futures & Options Trading

As the world's leading and most diverse derivatives marketplace, CME Group is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through the CME Globex electronic trading platform and trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the largest central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort.

Idea Exchange

Idea Exchange is your direct link to the product managers, marketers, and the development teams who create and will allow you to review functionality, participate in focus and provide feedback on upcoming Web initiatives

Idea Exchange - Join Our User Focus Program

Contact Us

CME Group/Chicago HQ:
Local: +1 312 930 1000
Toll Free: +1 866 716 7274

Global Customer Contacts

More CME Group Direct Lines
Phone list by department

Global Partnerships


Global Offices Contact Information

Calgary Houston Chicago New York Washington São Paulo Belfast London Singapore Hong Kong Seoul Tokyo Beijing

© 2014 CME Group Inc. All rights reserved.

CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX, and COMEX.