Business
Yen Crashes To 40-year Low, Slips Past ¥162 Despite Intervention Fears
Japanese yen hits a 38-year low against the dollar, surpassing ¥162, despite intervention speculation. Investors bet against the yen due to the wide interest rate gap with the US, expecting US rates to remain high. Tokyo officials remain on the sidelines, reiterating action "when necessary." Analysts warn intervention may only offer short-term relief, with forecasts suggesting a potential drop to ¥170 if trends persist.
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Japanese yen hits a 38-year low against the dollar, surpassing ¥162, despite intervention speculation. Investors bet against the yen due to the wide interest rate gap with the US, expecting US rates to remain high. Tokyo officials remain on the sidelines, reiterating action "when necessary." Analysts warn intervention may only offer short-term relief, with forecasts suggesting a potential drop to ¥170 if trends persist.
Summarized by AI; it may make mistakes. Check important info
The Japanese yen has fallen to its weakest level since 1986, breaching the ¥162-per-dollar mark as investors continue betting against the currency despite speculation that Tokyo could step into the market.
Lowest level in nearly four decades
- The yen touched ¥161.97 in New York before weakening further to ¥162.41 during Tokyo trading.
- It later traded around ¥162.20 against the US dollar.
- Japan's Nikkei 225 gained 0.86%, closing above 70,000.
Government stays on the sidelines
- Despite expectations of intervention around the ¥160 level, Japanese authorities did not enter the market.
- Finance Minister Satsuki Katayama only reiterated that the government would take action "when necessary."
- Analysts believe officials may be avoiding strong warnings to preserve the element of surprise.
Why the yen keeps weakening
- Japan's policy interest rate remains at 1%, compared with the US Federal Reserve's 3.50%-3.75% range.
- The wide interest rate gap continues to drive investors towards the dollar.
- Markets also expect US rates to stay elevated for longer.
What's next?
Analysts warn that unless the interest rate gap narrows, any future intervention may offer only short-term relief. Some forecasts suggest the yen could weaken towards ¥170 per dollar if current market trends continue.
