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Japanese Yen Falls to 161 Yen per Dollar, Lowest Level in 37.5 Years
- Writing language: Korean
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Base country: Japan
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Summarized by durumis AI
- The value of the Japanese yen fell to 161 yen per dollar on the 28th, hitting its lowest level in 37.5 years after surpassing 160 yen per dollar on the 26th.
- The widening gap between the US Federal Reserve's interest rate hikes and the Bank of Japan's easing monetary policy, as well as uncertainty in the US economy, are fueling yen weakness.
- The yen's value could rebound if the rate of interest rate hikes slows down depending on the results of the US inflation data to be released on the evening of the 28th. However, if inflation continues to rise, the yen could fall further.
The value of the Japanese yen, which fell to its lowest level in about 37 and a half years, exceeding 160 yen per dollar around 6:30 PM on the 26th, fell to the 161 yen range per dollar around 10:00 AM on the 28th. This is analyzed as a result of the continued weakness of the yen, amid growing concerns about the possibility of intervention by the Japanese government and the Bank of Japan (BOJ).
The recent decline in the value of the Japanese yen has been exacerbated by the widening gap between the US Federal Reserve's (Fed) interest rate hike stance and the Bank of Japan's accommodative monetary policy. While the US continues to raise interest rates to curb high inflation, the Bank of Japan is maintaining an accommodative monetary policy to stimulate the economy. This policy difference has widened the interest rate differential between Japan and the US, causing the value of the yen to continue to decline.
Uncertainty about the US economy is also affecting the weakness of the yen. Recent weak US economic indicators have increased concerns about a recession, which is intensifying safe-haven demand and leading to a decline in the value of the yen.
US inflation-related indicators are scheduled to be released on the night of the 28th, and the value of the yen is likely to fluctuate significantly depending on the results of these indicators. The market expects that if US inflation slows, the pace of interest rate hikes could slow, which could lead to a rebound in the value of the yen. Conversely, if inflation continues, the likelihood of interest rate hikes will increase, and the value of the yen could fall further. It remains to be seen how the value of the Japanese yen will move in the future, depending on the results of US inflation-related indicator releases and the direction of the Bank of Japan's monetary policy.
