On purchasing power parity, Naomi Fink says a dollar is worth about 100 yen. The currency is trading nowhere near that.
She does not forecast it getting there. The number is in the conversation to show how far the yen was pushed, and why she reads the current level as the residue of an overextension rather than a verdict on Japan.
"In fact, for Japan, I think it's very dangerous to look at the yen as some type of barometer of economic health."
Fink has been covering Japan since the deflation years and now runs global strategy and economics at Amova Asset Management in Tokyo.
The full segment is covered here so you can skip it.
Here are the 4 insights that matter.
👤 Guest: Naomi Fink, Chief Global Strategist and Chief Economist at Amova Asset Management, speaking from Tokyo
🎙️ Hosts: Tom Keene and Paul Sweeney, who anchor Bloomberg Surveillance on Bloomberg Radio
👥 Also on: Dan Ives of Yorkville & Ives, Lori Calvasina of RBC Capital Markets and David Tinsley of Bank of America, in separate segments of the same programme
📰 Published: 14 September 2026 on the Bloomberg Surveillance podcast feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ length not available
Key Takeaways
Purchasing power parity puts a dollar at about 100 yen, which she is explicit is not a forecast
She uses it to show how cheap the yen was at its weakest, not where it is going
The Bank of Japan does not set the intervention policy — the Ministry of Finance does, and the central bank only executes it
Japan's core inflation measure has been above the Bank of Japan's target for several years
Reading the yen as a measure of Japanese economic health is, in her word, dangerous
Health is better than it has been in a while; the currency is weak for a separate reason
A genuine risk-off move would strengthen the yen quickly, but that is not her base case
1. Same Institutions, New Era
Tom Keene opened by asking whether the institutions are the same ones he and Fink first dealt with — a different Bank of Japan, a different Ministry of Finance.
Her answer separated the bodies from the world they operate in. "Same institutions, but different context."
The context is the whole change. "So we're in a totally different economic context than when we first met." In her description Japan had been mired in deflation for decades and is now staging a remarkable recovery from them
She extended the point to the institutions themselves. "And institutions, just like everybody else, have to adapt to the times."
2. A Dollar at 100 Yen
Keene put the level to her — the yen at about 154.50, a long way from 163 and 164 — and asked what is moving it over the longer term: the central bank, or the Federal Reserve.
She started from fair value and said how far away the market is from it. "Well, longer term, let's take a look at measures of fair value of the yen, which we're very far away from."
The number, with the caveat attached to it before she gave it. "So if we look really long term, which I don't think is a good forecast, but purchasing power parity puts a dollar at about 100 yen."
The point of the number is retrospective, not predictive. "I don't expect that we're going to achieve that anytime soon, but it just tells you how cheap the yen was when it was, you know, 10 figures higher, or five figures higher even."
Her read of what happened is a stretch that has begun to correct. "So I think, you know, there was an overextension going on." Risk tolerance is still plentiful and US rates are still above Japanese ones, but a gradual normalization is under way — at the Bank of Japan above all, for this currency
The mechanism she is watching is liquidity, not the rate differential. "And so that means sooner or later, there's going to be less liquidity tomorrow in the future sometime than there is today."
3. The Ministry Intervenes
Asked where the Bank of Japan would like to see the currency by year end, Fink corrected the premise of the question before answering it.
The central bank is not the decision-maker on intervention. "Well, so the Bank of Japan is not in charge of intervention. That would be the Ministry of Finance, even though the Bank of Japan does execute the interventions."
And it does not run a currency target at all. "So the Bank of Japan, as far as I know, doesn't really tend to look at the yen as any type of target."
Its attention to the yen has increased for one reason only. "Recently, it's focus on the yen has intensified, but that's only because the yen is, the weak yen, I should say, is inviting more inflation than there might otherwise be if we didn't have such a weak yen."
The inflation picture is bigger than the currency, and has been for years. "If we look at the core measure of inflation, it's been above the Bank of Japan's target for several years now." She noted the bank looks at underlying inflation, which she distinguished from core: "I mean, it looks at underlying inflation, which is not quite core inflation."
Her summary of the distance travelled is that Japan has progressed a long way from the days of deflation and stagnation
4. The Yen Is Not a Barometer
Keene's last question was about the Pacific Rim — whether the region is stable, or whether the idiosyncratic moves such as the Philippine peso are the thing to watch.
Her regional observation is that the undervaluation is general. "Well, so. I mean, for Asia, there is, generally speaking, currency undervaluation if we look at it on a purchasing power parity basis to differing degrees." She does not attribute that to confidence in China or in any individual Asian economy
The warning she gave is about interpretation. "In fact, for Japan, I think it's very dangerous to look at the yen as some type of barometer of economic health."
She separated the two explicitly. "Economic health is probably better than it's been in a while in Japan, but the yen is weak. And the yen is weak because there's been this large amount of liquidity left in the system."
On volatility, she conceded the standard relationship and then bounded it. "As far as volatility goes, if we do see some sort of risk off trade, then yes, yen tends to strengthen."
The speed of that move is the risk, and it is not her base case. "If we see a whole bunch of risk being taken off the table, then I would expect the yen to strengthen quickly. But that's not my main scenario."
She added who else does not want it. "And I think that that's a scenario that most policymakers would like to avoid, if possible."
Fink's bottom line is that the yen's weakness is a liquidity story rather than an economic one, that the Bank of Japan's interest in it runs through inflation rather than through any target, and that the currency would snap back fast in a risk-off move she is not forecasting.
Bonus Insights
Keene made the segment personal before the first question. He described meeting Fink years ago, said she had continued to own the high ground on monitoring Japan over the years, and called it an immense joy to get a quick brief from her
The framing he used for the region was turmoil, twice — the immense turmoil in Japan and, as he put it, the very different turmoil in China — and Fink declined both framings in her answer, arguing the undervaluation across Asia is not a confidence story
Products, Companies & Tools Mentioned
Bank of Japan (Executes intervention but does not decide it, and does not run a yen target; its focus on the currency has intensified only because a weak yen adds to inflation)
Japan's Ministry of Finance (The body actually in charge of intervention, which she corrected the hosts on)
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