The Japanese currency was trading this Thursday above 171 yen per euro, the lowest since the creation of the European currency in 1999, after also exceeding 160 yen per dollar, for the first time in 37 years.
In the foreign exchange market, the Japanese currency reached 171.79 yen per euro in the early hours of the morning in Tokyo, the lowest level in its history, while against the dollar it was trading in the range between 160.78 and 160 .88 yen, the level the lowest since December 1986.
The Japanese Deputy Minister of Finance and main person in charge of foreign exchange issues reaffirmed the Government’s commitment to taking “appropriate measures” and added that the rapid depreciation represents “a serious concern.”
We do not have any specific levels in mind, but we are determined to respond to the rapid and disorderly moves led by speculators,” Masato Kanda said.
“In this context, the recent and rapid devaluation of the yen is a serious concern,” said the official, in statements published by the Japanese public news agency Kyodo.
The new depreciation of the yen came after rumors that the US Federal Reserve (Fed) could continue to postpone an expected interest rate cut and even return to increases to control inflation.
The United States Federal Reserve does not lower interest rates. “Inflation has slowed significantly but is still too high”
In March, Japan’s central bank decided to raise benchmark short-term interest rates to 0.1% in first increase in 17 yearsending decades of negative rates.
Japan’s central bank does not rule out further interest rate hikes to curb inflation
However, the yen continued to fall, as interest rates are still far from those practiced by major central banks, including those of the United States and the European Union.
The US dollar surpasses the 160 yen barrier for the first time since 1990
The weakness of the Japanese currency has been associated by analysts not only with this political divergence, but also with other risk factors such as the advance of the conflict in the Middle East and the increase in the price of oil in international markets.
The International Energy Agency reduces the global oil demand forecast for 2024 for the second consecutive month
A weak yen benefits foreign companies of Japanese companies, which see remittances inflated when they are repatriated and improve the competitiveness of their products.
On the other hand, it has a negative impact on Japan’s accounts, by making importssomething that the country is highly dependent.
Source: Observadora
