TOKYO, 26th June, 2024 (WAM) -- Japanese currency yen fell beyond 160 to the U.S. dollar to its lowest level in over 37 years, breaking key barriers despite heightened vigilance about another market intervention by Japan to slow its rapid drop.
Kyodo News reported on Wednesday that Japanese authorities have signalled in recent days their intention to respond to excessive volatility in the foreign exchange market, saying that currency movements should reflect fundamentals.
After crossing the psychological barrier of 160, its fall accelerated. The currency touched 160.39 at one point in London trading hours, its lowest level since December 1986.
It surpassed the 160.24 hit on 29th April, a level that likely prompted Japan to intervene by buying the yen for U.S. dollars.
The dollar has been sought on the prospect that the Federal Reserve will keep interest rates elevated for longer than expected on the back of recent U.S. data indicating a solid economy.
The Bank of Japan, for its part, raised its policy rate in March, but it remains around zero percent, leaving a wide interest rate gap between the two nations.
The yen's decline came a day after Japan and South Korea expressed "serious concerns" about the rapid depreciation of their currencies.
Last week, the United States put Japan back on its currency manipulator watch list, raising speculation that it may be more difficult for authorities to step into the currency market, dealers have said.
While no daily breakdowns have been released, the Finance Ministry has said it spent about 9.79 trillion yen (US$61 billion) between 26th April and 29th May to slow the yen's rapid fall against the dollar.
Japanese households continue to struggle with the rising cost of living, due in large part to the weaker yen making imported goods more expensive. Prime Minister Fumio Kishida is seeking to implement additional inflation-relief measures.