The Japanese Yen (JPY) is the world's third-most traded currency, behind the US dollar and the euro. It has long been considered a safe haven in overseas markets, a role it continues to serve in times of market stress. During mid-2022, the yen dropped to 24-year lows against the US dollar, due to a Bank of Japan (BoJ) policy decision not to raise rates with other central banks. This decision was a response to the deflationary economy that has plagued Japan for decades, leading the BoJ to set an inflationary target of 2%.

The yen's descent against other major currencies has been temporarily stabilized by the BoJ's commitment to the 2% targeted inflation rate and its engagement in quantitative easing programs, which have pushed the currency back up towards more reasonable levels. The BoJ has also been buying ETFs in an attempt to prop up Japan's stock market, further boosting the value of the yen.

The Japanese government has not taken kindly to the sharp decline of the yen, as it forces Japanese exporters to sell their products at costly prices in international markets. This could have a long-term damaging effect on Japan's economic growth, an outcome the government has attempted to avoid by intervening in the foreign exchange markets. Such actions have had only a temporary effect, and the yen may be subject to further downward pressure in the long-term.

All-in-all, the Japanese Yen is one of the world's most important currencies, but its long-term direction is difficult to predict due to the various external and internal factors affecting it. Its short-term outlook is much more certain and is likely to remain volatile as the BoJ implements its policies and other foreign exchange markets respond.