Japan’s yen weakens to 36-year low against US dollar
Date
6/27/2024 5:27:06 AM
(MENAFN) On Wednesday, the Japanese yen depreciated to levels not seen since 1986, surpassing 160 against the US dollar. The dollar/yen exchange rate reached a peak of 160.62 during trading, sparking speculations about potential interventions by Japanese authorities in the currency markets.
Throughout this year, the yen has experienced a significant decline of 13.8 percent, largely driven by diverging monetary policies between the bank of Japan (BoJ) and the US Federal Reserve. The yen's depreciation accelerated in June following the BoJ's decision to postpone details regarding cuts to its bond purchases until its upcoming July meeting.
In its June session, the BoJ opted to keep interest rates unchanged, in line with market expectations. However, traders were surprised by the absence of a clear timeline for reducing asset purchases, contributing to market uncertainty and further weakening the yen.
Earlier in March, the Bank of Japan made headlines by raising interest rates for the first time in 17 years, marking a departure from its longstanding negative interest rate policy. This move highlighted the BoJ's cautious steps towards normalization amidst global economic shifts.
The yen's current decline against the dollar underscores ongoing challenges and adjustments within Japan's economic policy framework, against the backdrop of global economic dynamics and central bank strategies. As market participants continue to monitor these developments closely, the yen's movements are expected to remain a focal point in global currency markets in the coming months.
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