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The yen continues to decline against the dollar and the dollar exceeds 129 yen

This content was published on Apr 20, 2022 – 04:09

(Update with BOJ intervention)

Tokyo, April 20 (EFE). – The Japanese yen continued its decline against the dollar on Wednesday, and the dollar exceeded 129 yen in the first hour, its lowest level since April 2002, in light of the possibility of an increase in the interest rate gap. .

The dollar moved around 129.30 yen after the first hour of trading on the Tokyo Stock Exchange, above the lower and upper band that swung between them at the close of operations in both the Japanese and New York markets the previous day.

The continuous decline in the value of the Japanese currency has accelerated so far this week, reaching this morning its lowest level against the dollar since April 2002, before rebounding close to the yen after the intervention of the Bank of Japan.

The Bank of Japan on Wednesday announced an unlimited purchase of state bonds to contain the uncontrolled rise of the currency and Japanese 10-year yields, which were already touching the desired maximum of 0.25%.

It is the second time in less than a month that a Japanese lender has taken this extraordinary step to stem rising long-term debt yields.

Analysts attribute this downward trend in the yen to the overall monetary easing strategy maintained by the Bank of Japan (BoJ) since 2013, which increasingly contrasts with the rate hike policies announced by the US Federal Reserve and those prepared by the Bank of Japan. The European Central Bank (ECB), put the Japanese currency at its lowest levels for years, as well as with the euro.

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The community currency was exchanged between the low and mid bands at 139 yen today, one unit more than the previous day, before also adjusting its high to the middle band of 138 yen.

Investors today welcomed the yen’s slide, which has led to volatility in the Tokyo stock market in recent days. The selective Nikkei benchmark rose to 1.49% until the BOJ operation was known, after which it adjusted its rally to about 0.7% at the start of the second part of the session.

This trend of depreciation of the Japanese currency helps enhance foreign remittances from domestic companies and their competitiveness abroad, but also has a negative impact on imports of energy commodities or raw materials.

The speed of the yen’s devaluation has alarmed financial authorities and prompted cautious comments from the Bank of Japan itself, shortly before the lender holds its next monetary policy meeting next week, raising expectations about its outcome. EFE


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