The Impact of a Weaker Yen Against the US Dollar on Japanese Real Estate

This study explores the impact of the widening interest rate differential between China and the United States on the Japanese real estate market during the Fed's rate hike cycle (March 2022 to August 2023). The study assumes that a weaker exchange rate will have an impact on the property market by affecting financing and investment activity. Through correlation analysis, this paper analyzes the relationship between exchange rate, loan interest rate, and real estate market indicators (including real estate price index, construction order volume, financing cost of real estate developers, etc.). The results show that there is a significant positive correlation between the depreciation of the yen against the US dollar and the real estate price index. The long-term loan interest rate is positively correlated with the exchange rate to some extent. The relationship between construction order volume and exchange rate is weak. There is a strong positive correlation between the financing cost of real estate and the exchange rate. These findings have implications for understanding how exchange rate fluctuations affect the real estate market and provide data reference for macroeconomic policymaking.