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Yen nears four-decade low, and Katayama issues warning
The Japan Times • • business
Key Points:
- The Japanese yen plunged past the ¥161-to-the-dollar mark, nearing its weakest level since December 1986, before slightly recovering to around ¥160.20 by Friday morning in Tokyo.
- Finance Minister Satsuki Katayama warned of decisive government intervention if the yen weakens further, though her tone was less forceful than during previous interventions in April and May.
- Experts suggest that market conditions, including thin trading volumes during Golden Week, made past interventions more effective, but current circumstances may limit the impact of new government actions.
- The Bank of Japan recently raised interest rates to 1%, the highest since 1995, but this move failed to strengthen the yen significantly as it was already anticipated by the market.
- Analysts expect further BOJ rate hikes later in the year, with about 90% predicting another increase, most likely in December, amid ongoing pressure from potential U.S. rate increases.
