YEREVAN, June 30. /ARKA/. The Japanese yen has weakened to 162 yen per dollar, hitting a nearly forty-year low, according to trading data. At one point, the Japanese currency fell to 162.4 per dollar – the lowest level since December 1986, and since the beginning of the year, the yen has already lost more than 3%, reports Frank Media.
The pressure on the currency has intensified due to the war in Iran, which has driven up oil prices, and concerns that the Bank of Japan is lagging behind other central banks in fighting inflation. Chief Cabinet Secretary Minoru Kihara stated that the authorities are ready to take action if necessary, but the new low has again sparked rumors of a possible currency intervention, according to the Financial Times.
According to MUFG senior currency analyst Lee Hardman, the spike in energy prices is putting pressure on the yen, while the Fed's “hawkish stance” is pushing the dollar higher. An additional factor has been the rally on the Tokyo Stock Exchange – the Nikkei 225 index has exceeded 72,000 points this year amid an influx of foreign investment in technology company stocks, which has also created pressure on the exchange rate.
The Bank of Japan raised its rate to around one percent in mid-June – the highest since 1995, while the Fed maintains a range of 3.5 to 3.75 percent. Columbia Threadneedle portfolio manager Ed Al-Husseini noted that Japan's monetary policy diverges significantly from that of the US and Europe, so the weakness of the yen is likely to persist.
