Yen Weakens Back Toward 158 Despite Bank of Japan Rate Hike
6 Articles
6 Articles
Why a Rate Hike Can Still Weaken a Currency
Japan did what economic intuition says should strengthen a currency. On September 18, the Bank of Japan (BOJ) raised its policy rate by 25 basis points to 1.25 percent, its highest level in 31 years. Yet the yen weakened rather than strengthened. The apparent contradiction offers a useful lesson. Interest rates matter for exchange rates, […]
At its recent monetary policy meeting, the Bank of Japan decided to raise interest rates to 1.25% for the first time in 31 years. However, a series of dissenting votes within the bank led to widespread discord in the markets. Why did this interest rate hike, which was supposed to be a trump card for defending the weak yen, fail to have a sufficient effect?
The yen weakened against the dollar, falling to its lowest level in three weeks. The yen briefly fell to the low 158 yen range against the dollar in the foreign exchange market. Better-than-expected economic indicators released in the US fueled expectations of further interest rate hikes this year to curb inflation, accelerating the yen's selling pressure. Last week, the Bank of Japan decided to raise interest rates, but the two dissenting votes…
As of 5:00 p.m., the yen exchange rate of the New York Foreign Exchange Market on the 23rd was 95 yen lower than the previous day and 1 dollar = 158 yen 32 to 42 yen higher than the previous day. Early observations of additional US interest rate hikes intensified, and yen sales and dollar purchases, which were conscious of the widening interest rate difference between Japan and the US, prevailed.
USD/JPY Continues to Rise as Intervention Risks Keep Yen Outlook Uncertain - ActionForex
USD/JPY consolidated around 157.60 on Wednesday, with the Japanese yen falling for a fourth consecutive day. Amid Japan’s long weekend, markets are closely monitoring the possibility of currency intervention. Concerns intensified following reports that the Bank of Japan conducted rate checks with market participants at the end of last week. Japanese authorities have previously intervened […]
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