On the 26th, a man looks at the foreign exchange price electronic display board installed in downtown Tokyo, Japan. On this day, the yen-dollar exchange rate exceeded 156 yen per dollar in the Tokyo foreign exchange market. / Yonhap News Reuters
The Yen increased to 158.33 yen per dollar at the New York foreign exchange market on the 27th. It has been 34 years since 1990 that the value of the yen fell to a level of 158 yen per dollar.
On the 26th, the Bank of Japan decided to maintain the current base interest rate of 0-0.1% at its monetary policy decision meeting. The Bank of Japan raised its base interest rate by -0.1% last month, ending its 17-year negative interest rate policy. However, at this meeting, held for the first time since then, there was no further increase in the interest rate. Immediately after the Bank of Japan’s announcement, the yen-dollar exchange rate in the Tokyo foreign exchange market exceeded 156 yen. Afterwards, Bank of Japan Governor Kazuo Ueda said at a press conference, “The loosening financial environment will continue for now,” and the exchange rate rose above 157 yen.
The yen-dollar exchange rate was around 140 yen at the beginning of this year. This year alone, its value against the dollar has fallen by 11%. The background is that the US raised interest rates through aggressive tightening, while Japan maintained low interest rates. Governor Kazuo’s comments in this situation are evaluated as accelerating the decline in the Yen by adding weight to the observation that it is difficult for the Bank of Japan to raise interest rates early. However, given the rapid pace of recent yen depreciation, there is still a sense of wariness about the Japanese authorities’ intervention in the market.
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