JAPAN’S YEN PLUNGES TO 34-YEAR LOW AGAINST THE US DOLLAR

Mon 29 April 2024:

The Japanese yen has hit a 34-year low against the US dollar.

The yen fell to 160.17 per dollar on Monday, its lowest level since April 1990, sparking speculation that Japanese officials could intervene to support the currency for the first time since late 2022.

Though the Bank of Japan (BOJ) raised interest rates last month for the first time in 17 years, the downward spiral has continued in recent weeks as prospects of US interest rate cuts fade amid above-target inflation.

The yen has been on a continual slide since early 2021 as the Bank of Japan (BOJ) has maintained ultra-low interest rates, while the US Federal Reserve and other central banks have hiked borrowing costs.

BOJ Governor Kazuo Ueda said in a news conference that exchange-rate volatility would only affect monetary policy if there was a significant impact on the economy.

“If yen moves have an effect on the economy and prices that is hard to ignore, it could be a reason to adjust policy,” Ueda said.

Japanese officials have repeatedly stated that they are prepared to step in to prevent sharp movements in the exchange rate, though authorities have refrained from intervening during the currency’s year-long slide.

Although the weakening yen has benefited Japanese exporters by increasing profits and putting more money in the hands of visitors, the increased cost of imported products has put pressure on the budgets of households.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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