Just over a week following the Bank of Japan’s announcement of a much-anticipated interest rate hike, the yen has reached its weakest point in 34 years against the dollar.
Overnight, the yen was traded at 151.97 per dollar, a drop of approximately 0.2 percent, surpassing its previous low of 151.94, recorded when Japanese authorities last intervened to bolster the currency in October 2022. Against the pound, the yen stands at 191.39.
As the yen hit its lowest level since the early 1990s, a period marked by the bursting of Japan’s financial bubble and subsequent economic stagnation, Japan’s Finance Minister Shunichi Suzuki issued his most forceful warning yet about the currency’s depreciation. Suzuki suggested the possibility of “decisive steps,” a term he had used before Japan’s last market intervention to address the currency’s decline.
Suzuki stated, “We’re monitoring market movements with a high sense of urgency. We will take resolute action against excessive moves, without ruling out any options.”
In a notable policy shift, the Bank of Japan last week put an end to negative interest rates, raising borrowing costs for the first time in 17 years from minus 0.1 percent to a range of zero to 0.1 percent.
