Will the Yen reflect Japan's economy over time?

[ToushiTime]

I often wonder whether long-term economic performance correlates with the strength of a currency. A quick search found this:
https://www.economicshelp.org/blog/1432 ... -currency/

Over the next 20 to 30 years, I find it hard to imagine Japan's economy doing better than the other developed markets we invest in, given its demographic issues, lack of start-ups, isolation, relatively weak IT industry, large national debt etc etc. The yen may strengthen if the Bank of Japan raises rates to control imported inflation but again, I cannot imagine this economy heating up enough to require high interest rates for long. And stagflation would surely scare away capital from the yen, not attract it? From what I read, the yen seems to have lost its safe haven status.

Either way, I don't see any alternative to plugging away with DCA in eMaxis SLIM All Country etc. Just interested in your thoughts on this.



*On a micro level, I think it balances out over time:
If the yen keeps falling, it increases the yen value of 90% of my existing portfolio which is already invested in foreign-denominated assets, but it means I will get fewer of those overseas assets for each fixed-amount tsumitate contribution that I continue to make in yen.
If the yen rises, the opposite is true.

[Wales4rugbyWC23]

It was an old City grandee who said the currency of country is like its share price for that country. If lots of money is being made~economy doing well in the country, then value of the currency will go up. The Japanese economy really hasn't grown over the last thirty years.

[Yutaka2024]

japan is kind of screwed in simple terms imo, but you as a individual should do your best to capitalize on any siutation to best u can