The yen is about to surpass the dollar as the benchmark in world trade.
The move is likely to add to pressure on European Central Bank policymakers who are struggling to boost the European economy.
The currency has rallied about 1 per cent this year, to about 105.8 yen, since January, a year when global economic turmoil and the euro crisis led to a global financial crisis.
The yen gained almost 10 per cent in 2017 against the dollar and has gained an additional 4 per cent against the yen as of Dec. 31, according to the Japan Exchange Services Corp. The dollar is now the top foreign currency, but its appreciation has helped keep the euro from falling as much as it did earlier this year.
Japan has seen a surge in imports of U.S. goods and services since the financial crisis and the Brexit vote, pushing up its gross domestic product by 1.5 per cent.
Japan’s central bank also cut its benchmark rate by a quarter of a percentage point to 0.25 per cent, the most in a decade.
The central bank is currently keeping interest rates unchanged at 0.4 per cent and its target for inflation is around 2 per cent per year.
The rise in the yen against the pound is likely partly driven by a rise in oil prices and the continued fall in oil exports to the United States, the world’s second-biggest consumer.
The British pound has appreciated about 10 per by almost 20 per cents against the greenback since the election of Donald Trump in the U.K. in November.
But the yen has gained about 7 per cent since then, according, to data compiled by Bloomberg.
It is still not a strong position for the U of T student-debt-management program that has been in place since June.
In the short term, however, the yen can be an important hedge against a weaker U.N. climate deal and a weaker European Union, where the bloc has been struggling to find ways to stem the effects of global warming.
The U.s. and EU have been trying to agree on a new climate deal for five years, and both sides are hoping to reach it this year with a new deal that has not yet been finalized.
The current climate deal will last for three years, until 2027, with the EU paying about $100 billion a year.
But some in the United Nations are skeptical that the U,S.
and other countries can agree on such a pact this year or in the next, and many countries, including the U., are pushing for a more ambitious agreement.