KEY POINTS:
- Dented yen sinks beyond ¥157.
- Dollar rallies across the board.
- When’s the next interYention?
- Japanese yen is the biggest loser among the major forex players this year. But Japanese officials may try to change that.
- The USDJPY pair advanced Wednesday morning and was on track to notch its sixth day of consecutive winnings. Traders once again played favorites with the US dollar, pumping its valuation across the board, but especially against a weakened rival. The Japanese yen sank beyond ¥157.00 to the greenback, marking a fresh monthly low. Or, the other way around, a fresh monthly high for the dollar-yen.
- The exchange rate is slowly but steadily marching toward the multi-year high of ¥160.20 logged in late April. Back then, Japanese officials couldn’t hold back anymore and decided to wade in by injecting a $60/Billion Boost into the battered yen. The effect, however, was short-lived as the yen only appreciated 5% before dollar bulls charged ahead and erased that advance.
- The dollar rally has turned the yen into the biggest loser among the major forex players this year. The Japanese currency is down nearly 20% from its 2024 opening rate of ¥133 to the current market level of ¥157.20. And with that, the weak valuation is hurting Japan’s economy as it makes imports like energy and food more expensive. It also lays the groundwork for higher inflation. What’s next? Japan’s decision makers have said they’re monitoring the yen’s moves and are ready to step in again at any moment.