Japanese Yen Tumbles to 34-Year Low, Crossing 160 vs Dollar

Japanese Yen Tumbles to 34-Year Low, Crossing 160 vs Dollar

The Japanese yen experienced significant volatility in foreign exchange markets, briefly sinking to a 34-year low against the US dollar, crossing the 160 yen mark before rallying back to around 155 yen. This level had not been seen since April 1990. The yen's sharp drop extended to the euro as well, reaching approximately 171 yen to the euro, its weakest since the euro's introduction in 1999.

The rapid decline in the yen's value led to speculation among market participants about the possibility of intervention by Japanese authorities, which would be the first such move since 2022. Despite the currency's weakening, the Bank of Japan (BoJ) has kept its monetary policy steady, with interest rates remaining between zero and 0.1 percent. This decision comes in the context of an elevated US inflation report, which has affected global currency dynamics and prompted expectations of continued high-interest rates by the US Federal Reserve.

Concerns have been raised about the impact of the yen's depreciation on Japan's economy, particularly regarding the cost of imports. However, Bank Governor Kazuo Ueda has indicated that he does not expect any significant impact on prices due to the recent decline. As markets anticipate the Federal Reserve's policy review, the yen's movements remain a focal point, with investors closely watching for any signs of policy shifts or interventions that could affect its trajectory.


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