The Japanese Yen It weakened above 150 against the US dollar, a key psychological level, and reached levels not seen since August 1990.
The Bank of Japan’s two-day meeting is scheduled for next week. Policy makers have ruled Raise the interest rate to defend against further currency weakness.
Thursday, Japan Government debt yield for 10 years It broke through the 0.25% cap the central bank had pledged to defend – last time at 0.252%. The yield on the 20-year bond also rose to its highest level since September 2015.
Bank of Japan too announce Thursday’s emergency bond purchases. It offered to buy 100 billion yen ($666.98 million) of Japanese government bonds with maturities between 10 and 20 years and another tranche of 100 billion yen with maturities between 5 and 10 years.
The central bank has repeatedly pledged to buy an unlimited amount of bonds at a fixed rate in order to set the 10-year government bond yields at 0.25% as part of its stimulus measures for the economy.
On Thursday, Reuters reported that Japanese Finance Minister Shunichi Suzuki said the government would take “appropriate steps against excessive volatility.”
“Recent rapid declines in the Japanese yen are undesirable. We can never tolerate the excessively volatile moves driven by speculative trading,” he said.
When asked how concerned the USD/JPY is at levels around 150, Richard Yizinga, chief economist at ANZ, said he was “not that concerned”.
“I don’t think we’re on the way to destabilizing the currency area yet,” he said on CNBC’s “Scock Box Asia.”
“There are a lot of sentimental words about it, but what problems did it create?” He said.
Shortly after the Bank of Japan’s recent decision to maintain low interest rates to support the country’s stagnant economy last month, officials confirmed that they had intervened to prop up the currency against further weakness.
who – which judicial intervention The yen was briefly pushed to 142 per dollar. The spread between the highest and lowest point of the day was also at its widest since 2016.
In April 1990, the yen traded around 159.8 against the dollar and the last break of 160 was in December 1986.
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