The American dollar traded at 160.39 yen on June 26. This rate was last recorded in December 1986.
Japan’s yen fell to its lowest level in nearly 40 years against the dollar, keeping currency markets on alert for any sign of intervention by Japanese authorities to shore up the currency. It was reported by Reuters.
The American dollar traded at 160.39 yen on June 26. This rate was last recorded in December 1986, as the gap in interest rates between the two countries continues to weigh on the Japanese currency.
Analysts said traders were testing the decision by Japan’s Finance Ministry and central bank, which spent $62 billion in late April and early May to prop up the currency after the collapse.
It is noted that so-called carry trade strategies play an important role here, when investors borrow low-yielding currencies to invest in high-yielding ones.
Although Japan has raised interest rates from zero to 0.1% this year, US rates are holding at 5.25% to 5.5%. That means investors are flocking to higher-yielding dollar assets, pushing the currency higher against the yen.
There is a possibility of a further rate hike from the Bank of Japan at the end of July, which could help support the yen/dollar exchange rate. However, any continued increase would likely require the Federal Reserve to cut interest rates.
Let us remind you that the National Bank of Ukraine slightly strengthened the hryvnia exchange rate against the dollar, after the American currency updated its historical record eight times in a row.
Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.