The Japanese yen has plummeted to its lowest level against the dollar in 38 years, amid uncertainties about the pace of future interest rate hikes.
Today, the yen dropped by 0.4% to 160.31 per dollar, increasing the likelihood of intervention by the Bank of Japan to support the currency’s value.
Japanese authorities, including Finance Minister Shunichi Suzuki, have stated they are closely monitoring currency market developments.
This recent decline has pushed the yen below the levels that prompted market intervention in April.
The significant disparity between interest rates in Japan, which range from 0% to 0.1%, and those of the US Federal Reserve, which range from 5.25% to 5.5%, is exerting pressure on the yen.
The currency has depreciated by over 12% this year alone, following the Bank of Japan’s decision to end its negative interest rate policy, which was intended to stimulate inflation in the economy.
