The yen hit a new 34 year low on Wednesday.
- It fell to ¥151.94 against the dollar.
- The Yen has fallen by more than 7% this year.
- Japan recently rose their interest rate to 0.1% following years of negative monetary policy.
- This sparked some fears for yen volatility despite the yen being historically considered as a stable currency.
- Additionally, Kazuo Ueda claimed that he is not yet fully confident in the economy stabilizing at 2% target inflation, again diminishing investor confidence.
- Japanese bond yields are also much weaker than their US counterpart, putting downwards pressure on the yen.
- This yen slump increased the risk of market invention.
- Shunichi Suzuki, the finance minister, admitted that the government “would not rule out any steps against any excessive moves”.
- In late 2022, Japan directly intervened to keep the yen from falling too low, this was for the first time since 1990. They spent an estimated 9.2tn Yen and this was following the yen hitting 151.94, lower than the low on Wednesday.
- Japanese monetary authorities called for an emergency meeting on Wednesday (originally planned to be on Thursday) to mitigate the yen’s plummet.
- As of now the Yen has stabilised around $151.
- With the US Federal reserve planning rate cuts, the Yen may see more luck in the future.