U.S. Fund Managers Shun the Yen, Awaiting Clear Policy Signals from Japan
Alina Collins
The yen hit 163, a near-forty-year low. Most U.S. institutional investors call it deeply undervalued — yet none are buying. Unclear policy direction is the core reason money stays on the sidelines.
How far has the yen fallen?
The yen dropped to the 163 range this week, its weakest level in nearly forty years.
During Golden Week, Japanese authorities intervened jointly, pushing the yen back to around 155 — but uncertainty over U.S.–Iran tensions and rising oil prices dragged it down roughly 7 yen since then.
This means → the intervention's effect has been fully digested; the yen is back on a downward path.
What do fund managers think of the yen?
Bob Michele, global head of fixed income at JPMorgan Asset Management, said the yen and JGBs are "cheap by any conventional measure" — whether judged by purchasing-power parity or bond markets.
Idanna Appio, portfolio manager at First Eagle Investment Management, also called the yen "deeply undervalued" and expressed surprise that authorities have not intervened again.
In plain terms = professional institutions almost unanimously say the yen is "too cheap" — but "cheap" does not mean "time to buy."
If it's cheap, why isn't anyone buying?
Michele pointed out that Japan's expansionary fiscal policy combined with the BOJ's slow rate hikes is suppressing confidence — "few investors are willing to step in unless they see more discipline from policymakers."
David Clewell, portfolio manager at T. Rowe Price, said he closed his long-yen position after the last intervention and has not rebuilt it.
This means → investors are not waiting for the yen to get cheap enough. They are waiting for a substantive shift in Japan's policy mix.
Where is the authorities' line in the sand?
Rushabh Amin of Allspring Global Investments noted that 165 yen per dollar is the tolerance level BOJ and MOF officials have publicly stated — "that's the level they said is acceptable."
At 163, the market is only about 2 yen away from that threshold, actively testing the line.
This reflects an awkward standoff: authorities drew a line, but the market lacks confidence that crossing it will actually trigger action.
Content is for reference only, not financial advice.