Yen’s Historic Plunge: Lowest Value Against Dollar in 34 Years

The yen’s value fell to a 34-year low as the dollar-yen exchange rate surged to the threshold of 155 yen during trading.

According to Kyodo News, on the 23rd, the dollar-yen exchange rate in the New York foreign exchange market the day before (local time) rose to 154.85 yen per dollar during trading.

Despite joint verbal interventions by the finance ministers of South Korea, the US, and Japan and the announcement of a joint statement on the foreign exchange market by G7 finance ministers, the trend of yen weakness is unbroken.

The yen’s value has fallen to the upper 154 yen range for the first time in 34 years since June 1990.

Japan’s public broadcaster NHK analyzed, “As the US economy remains robust and senior officials of the Federal Reserve System (Fed) have been cautious about interest rate cuts last week, the movement to sell yen and buy dollars is expanding due to the interest rate difference between the US and Japan.”

Federal Reserve Chairman Jerome Powell suggested on the 16th that inflation would take more time to decrease to 2%, and he will not cut the benchmark interest rate for now.

Recently, demand for the yen temporarily increased as geopolitical risks in the Middle East increased, but since then, the yen has returned to weakness, and the dollar-yen exchange rate has continued to rise.

Attention to Japanese government intervention in the rise of the dollar-yen exchange rate

The dollar-yen exchange rate was in the 140 yen range in January this year but has steadily risen.

As a result, the market is predicting that if the dollar-yen exchange rate breaks through 155 yen, there is a high possibility that the Japanese government will actively intervene in the foreign exchange market.

Hi Investment & Securities warned, “If the Japanese government does not intervene despite the trend of the dollar-yen exchange rate exceeding 155 yen, global foreign exchange market instability could expand, which could also affect the dollar-won exchange rate.”

They added, “The results of the monetary policy meeting of the Bank of Japan to be held on the 25th and 26th will be crucial.”