Japanese yen plunges to new 20-year low against US dollar

On April 19, 2022, an electronic quotation board shows the foreign exchange rates, including the yen's rate against the US dollar left and euro center, at a foreign exchange brokerage in Tokyo. KAZUHIRO NOGI AFP TOKYO -- The Japanese yen plunged to a new 20 year low against the US dollar on Tuesday as concerns continued after a rise in US Treasury yields about a widening gap between Japan and the United States.

The euro was in the position of 1.0767 -- 0771 dollars and 137.52 yen against 1.0776 -- 0786 dollars and 136.87 yen in New York and 1.0790 -- 0792 dollars and 136.64 yen in late afternoon trade in Tokyo.

The dollar's appreciation against the yen increased in the morning to the upper 127 yen range, marking its highest level since 2002, triggered by the 10 year US Treasury bond climbing overnight to its highest level since December 2018.

Market strategists said that investors pulled into the US dollar after comments made by Federal Reserve Bank of St. Louis President James Bullard the previous day, suggesting that a 3.5 percent interest rate would be desirable by the end of the year to combat inflation.

Yuji Saito, head of the foreign exchange department at Credit Agricole Corporate Investment Bank in Tokyo, said that the US central bank may become more aggressive in its fight against inflation because of his hawkish remarks.

The Bank of Japan BOJ Governor Haruhiko Kuroda said on Monday that recent declines of the Japanese yen could negatively affect Japanese firms' earnings outlook and the nation's already struggling economy.

The yen's recent depreciation against the US dollar has been quite rapid, Kuroda told a parliamentary session.

The BOJ chief said it is more desirable that currencies reflect economic fundamentals, with his assessment of recent volatility in the currency markets due to concerns about the impact this could have on Japan's fragile economy.

The sudden depreciation of the Japanese currency caused Japan's Finance Minister Shunichi Suzuki to say bad would be a good word to describe the yen's recent depreciation.

Japanese mainstay exporter firms cheer on a weaker yen as it increases price competitiveness in overseas markets and can see profits boosted when favorable exchange rates are repatriated.

A recent surge in energy and commodities that resource-poor Japan has to import hurting companies' balance sheets due to the weakness of the yen, which is weighing on consumer spending, market analysts said.