The US dollar has been performing well this Thursday at a stable point as it reaches a 2-week peak. The main reason behind this is probably the rise in Treasury yields and investors being more willing to commit to trades. With this growth of dollar prowess, the best yen exchange rate has managed to reach a value of over 150 to the dollar. This was a vital point for the yen, and surpassing it has made investors nervous over the Japanese currency. Specifically, it indicates that an intervention by Japan’s bank seems likely in the coming days and weeks ahead.
Recently, the weakening of the Japanese yen has led the currency to its lowest point, at a value of 150.48 to the dollar. In terms of yen to dollars, that is $0.0066. This is worryingly close to its low in October last year, which was 151.94 to the dollar. At that point, Japanese government officials felt like they had to intervene to buoy the yen.
Suzuki has told traders not to sell yet, as government officials were keeping a close eye on yen movements. He has stated that authorities feel a lot of worry about the current situation, as they had done last year. However, he did not directly state whether or not the government would intervene right now.
The strength of the US dollar was bound to push the yen into this kind of territory eventually. This is especially true with the cap on the yen.
The best yen exchange rate fell by 20% since the start of US rate hikes overall. Interest rates have been soaring worldwide due to inflationary pressure for a while now. Japan had been resisting making any rate hikes during this period. However, it seems that now may finally be the time to increase the yield cap for Japan’s central bank.
