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The Japanese yen is at a 20-year low against the US dollar!

Updated: Jul 22, 2022

The yen has never been weaker and your dollar will never go further - at JNW we are confident that Japan will open up shortly for international travellers so now has never been a better time to book your holiday, or buy your holiday home. Below is a link to the Japan Times podcast on 'Why the yen has fallen to a 20-year low' as well as a recent article from Reuters on the dollar hitting a 20-year high....check them out below

Deep dive from the Japan Times, April 20

Since the beginning of March, the value of the yen has plummeted against the dollar, the euro and the British pound. Bloomberg economy reporter Yuko Takeo joins Deep Dive to explain why here

NEW YORK, April 28 (Reuters) - The dollar hit a 20-year high against rivals on Thursday as the Bank of Japan doubled down on its dovish policy, sending the yen to its weakest level since 2002, while the euro hit a five-year low on growth concerns for the region.

The dollar shot past the key level of 130 yen after the BOJ strengthened its commitment to keep interest rates ultra-low by vowing to buy unlimited amounts of bonds daily to defend its yield target. read more

"The BoJ gave the 'all clear' to continue selling the yen," said Lee Hardman, a currency analyst at MUFG Bank in London.

There had been some market speculation the BOJ might step back a little given the pressure building across foreign exchange markets.

A finance ministry official responded that Japan will take appropriate action in currency markets, calling recent moves "extremely worrying." read more

The yen was last at 130.90, after reaching 131.25, the weakest since April 2002.

The weak yen helped to catapult the dollar to its highest level since December 2002 against a basket of currencies. The greenback has benefited from expectations the Federal Reserve will hike rates faster than peers, which would likely expand the yield gap between U.S. and Japanese government bonds (JGBs).

"This move in dollar/yen has been primarily due to long-end spread widening between U.S. Treasuries and JGBs," said Bipan Rai, the North American head of FX strategy at CIBC Capital Markets in Toronto.

The dollar index was last at 103.62, up 0.62% on the day, after reaching as high as 103.93.

The Fed is expected to raise rates by 50 basis points when it concludes its two-day meeting on Wednesday. Aggressive increases are likely to follow at subsequent meetings, with fed fund futures traders pricing for the Fed's benchmark rate to rise to 2.73% by year-end, from 0.33% now. ,

The greenback pared gains after data showed U.S. economic growth unexpectedly contracted in the first quarter as a resurgence in COVID-19 cases disrupted activity. read more

Rai said, however, that the data did not necessarily reflect a weak economy, but was unduly impacted by a sharply wider trade deficit, which was due to surging imports.

"If you actually peel that away and look at the underlying consumption and investment trends, both of those still look reasonably healthy," Rai said.

The euro dropped below the key psychological level of $1.05 as investors remained nervous about Russia cutting off gas to parts of the region for refusing to pay in roubles.

The European Commission on Thursday warned buyers of Russian gas they could breach sanctions if they converted gas payments into roubles, as officials struggled to clarify the EU's stance on Moscow's payments scheme, which has sowed confusion in the bloc. read more

The euro was last $1.0505, after earlier reaching$1.0470, the lowest since Jan. 2017.

Information references

Japan Times


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