The Yuan and Yen Need the Fed’s Help. They Might Not Get It.

All eyes are on the Federal Reserve meeting this week. Central bankers at Asia’s two largest economies will be paying extra attention.

The Chinese yuan and Japanese yen are both hovering at their lowest levels against the dollar in more than a decade. The yuan has lost 13% versus the dollar since the beginning of 2022 while the yen has dropped 22%.

Both countries are grappling with weakening currencies—but their economies are in quite different situations. China must ward off deflation as its real estate implosion continues to weigh on industry and consumer sentiment. Japan, on the other hand, is contending with its highest inflation in decades.

Yet there are some important similarities too. Both countries’ central banks have pursued relatively loose monetary policies as growth challenges have mounted—in contrast with most other developed economies, which have been raising rates rapidly. China has been cutting interest rates and the amount of cash banks must hold in reserve to juice up its economy. Japan is hesitant to give up its longstanding policy of targeting ultra low interest rates in fear that the country could eventually slip back into deflation or near-deflation, too—a problem it wrestled with for years in the wake of its own burst asset bubble in the 1990s.

Widening interest rate differentials with the U.S. have put both currencies under pressure. Yields on Japan’s 10-year government bonds are 3.6 percentage points lower than on U.S. equivalents. The difference between Chinese and U.S. bonds is 1.7 points.

Both currencies have nonetheless staged a modest rebound from their lows lately. The People’s Bank of China warned speculators not to bet against the yuan earlier this month. Around the same time, Bank of Japan Gov. Kazuo Ueda told domestic media that an end to the BOJ’s negative rate policy could be in the cards if its 2% inflation target is sustained.

The risk of capital outflows probably makes China uneasy. It saw net outflows pick up to $42 billion in August, the fastest pace since 2016, according to Goldman Sachs. Given the country’s semi-closed capital account, there are many tools it can employ to slow the pace of depreciation. Borrowing costs for the offshore yuan have gone up, which could deter some short-term speculators.

Yet ultimately, economic fundamentals—and monetary policy—will still drive the yuan’s trend. While the Fed looks likely to pause its rate increases, a stronger-than-expected economy could keep U.S. rates higher for longer. To stabilise its economy, China will likely need more monetary and fiscal stimulus than has been unveiled so far—meaning an even higher interest rate differential and probably, higher imports once fiscal stimulus starts to kick in. Both of those will tend to weigh on the currency, especially if U.S. rates stay parked at their current high level in 2024.

In Japan, meanwhile, the central bank looks likely to tighten eventually as it becomes more confident that inflation—at a low level—has become more baked into households’ expectations. Japan’s core inflation, which excludes fresh food, has stayed above the central bank’s 2% target for more than a year already. Japan’s 10-year government bond yields rose to their highest level since 2014 recently.

China and Japan’s plunging currencies may chart different paths going forward—especially since the yen is already down so far against the dollar over the past two years. But they could both use an assist from the Fed, which may not be forthcoming for quite a while.

From late 2026 and into 2027, PONANT Explorations Group will base two ships in French Polynesia, offering travellers a choice between a culturally immersive classic and a far more exploratory deep-Pacific experience.

The move builds on more than 25 years of operating in the region with the iconic m/s Paul Gauguin, while introducing the expedition-focused Le Jacques Cartier to venture into lesser-known waters.

Together, the two vessels will cover all five Polynesian archipelagos — the Society, Tuamotu, Austral, Gambier and Marquesas Islands — as well as the remote Pitcairn Islands.

THE PAUL GAUGUIN: CULTURAL IMMERSION, POLYNESIAN STYLE

Long regarded as the benchmark for cruising in French Polynesia, m/s Paul Gauguin will remain based year-round in the region.

Renovated in 2025, the ship continues to focus on relaxed, culturally rich journeys with extended port stays designed to allow guests to experience daily life across the islands.

A defining feature of the onboard experience is the presence of the Gauguins and Gauguines — Polynesian hosts who share local traditions through music, dance and hands-on workshops, including weaving and craft demonstrations.

The atmosphere is deliberately intimate and internationally minded, catering to travellers seeking depth rather than distance.

Across the 2026–27 seasons, the ship will operate 66 departures, primarily across the Society Islands, Tuamotu and Marquesas, with select voyages extending to Fiji, Tonga and the Cook Islands.

LE JACQUES CARTIER: EXPLORATION AT THE EDGE

Le Jacques Cartier introduces a more adventurous dimension to PONANT’s Polynesian offering, with itineraries focused on the least visited corners of the South Pacific.

The ship will debut three new “Discovery” itineraries, each 14 nights in length, which can also be combined into a single, extended 42-night voyage — the most comprehensive Polynesian itinerary currently available.

In total, the combined journey spans six archipelagos, 23 islands and the Pitcairn Islands, a British Overseas Territory rarely included on cruise itineraries.

Unlike the Paul Gauguin’s cultural focus, Le Jacques Cartier centres on exploration.

Each day includes one guided activity led by local experts, with excursions conducted via tenders, local boats and zodiacs. Scuba diving is available on board, supported by a resident instructor.

Across the 2026–27 period, the ship will operate nine departures, offering a deliberately limited and low-impact presence in some of the Pacific’s most isolated communities.

THREE NEW DISCOVERY ITINERARIES

The new itineraries aboard Le Jacques Cartier include:

– Secret Polynesia: Unexplored Tuamotu, the Gambier Islands and the Austral Islands
– From Confidential French Polynesia to Pitcairn Island
– Polynesian Bliss: Marquesas and Tuamotu

Each voyage departs from Papeete, with prices starting from $15,840 per person.

SCOUTING THE PACIFIC’S MOST REMOTE COMMUNITIES

In preparation for the new itineraries, PONANT Explorations Group undertook extensive scouting across the Austral and Tuamotu Islands to develop activities in collaboration with local communities.

José Sarica, the group’s R&D Expedition Experience Director, worked directly with residents to design experiences including welcome ceremonies, cultural workshops and visits to marae, the region’s sacred open-air temples.

Six new ports of call have been confirmed as part of this process, spanning both the Tuamotu and Austral archipelagos.

SIX NEW PORTS OF CALL CONFIRMED

New stopovers include:

– Mataiva, known for its rare mosaic lagoon
– Hikueru, home to one of the largest lagoons in the Tuamotus
– Makemo, noted for its red-footed boobies and frigatebirds
– Raivavae, famed for its crystal-clear lagoon pools
– Tubuai, rich in marae and spiritual heritage
– Rurutu, known for limestone caves and seasonal humpback whale sightings

A DUAL EXPERIENCE, ONE DESTINATION

By pairing its long-established cultural voyages with expedition-led exploration, PONANT Explorations Group is positioning French Polynesia not as a single experience, but as two distinct journeys — one grounded in tradition and comfort, the other pushing into the furthest reaches of the Pacific.

For travellers seeking either immersion or discovery, the South Pacific is about to feel both familiar and entirely new.