The yen weakened against the dollar on Wednesday, reaching its lowest level since 1990. This decline has sparked concerns about potential intervention from Japanese authorities to support their currency.
The dollar reached a high of 155.17 yen, its strongest point since 1990, before experiencing fluctuations in choppy trading. This volatility indicates market nervousness surrounding the 155 level. Currently, the dollar stands at 154.97, representing a 0.09% increase.
The yen's depreciation follows a series of robust U.S. inflation data, which has pushed the dollar to five-month highs and strengthened expectations that the Federal Reserve will maintain its current interest rate policy.
The yen's decline against the dollar has reignited anticipation of currency intervention. Japanese Finance Minister Shunichi Suzuki and other policymakers have expressed their close monitoring of currency movements and their readiness to take necessary actions.
The strong dollar dominated last week's International Monetary Fund and World Bank spring meetings in Washington. The United States, Japan, and South Korea issued a rare joint statement addressing the issue.
Following the Group of 20 finance leaders' meeting in Washington, Bank of Japan Governor Kazuo Ueda stated that the Japanese central bank might raise interest rates again if the yen's depreciation significantly contributes to inflation. This highlights the dilemma that the weak currency poses for policymakers.
The Bank of Japan will conclude its latest policy meeting on Friday.