Japanese Yen Sees Its Lowest Level in 40 Years: 163 Barrier Against the Dollar Surpassed
핵심 요약
- 1. The Japanese yen saw the 163 yen level for the first time since 1986 on 21 July.
- 2. Despite changes in central bank policies and official interventions, the yen continues to lose value.
- 3. The decline of the exchange rate negatively affects Japanese consumer prices through imported energy costs.
- 4. The chief strategist at Kshitij Consultancy Services predicts that the yen could retreat to the 170 level against the dollar.
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The Japanese yen continued to lose value against the US dollar, testing its lowest level in 40 years. In transactions made on 21 July, the dollar/yen parity surpassed the 163 level for the first time since 1986. Having approached the 162 barrier at the end of June, the exchange rate maintained its downward trend.
The weakening of the yen could not be stopped despite the Bank of Japan's (BOJ) leadership change and the abandonment of its negative interest rate policy. Additionally, interventions by Japanese officials into the market to support the currency also failed to prevent the decline. This depreciation in the yen has started to reflect on consumer prices through imported energy costs.
Speaking to Bloomberg, Vikram Murarka, founder and chief FX strategist at Kshitij Consultancy Services, predicts that the dollar/yen parity could drop to the 170 level. While stating that the main scenario is further weakening of the yen, the expert emphasized that the Japanese Ministry of Finance's power to change the market has significantly diminished.
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자주 묻는 질문
- 1. Q: When was the last time the Japanese yen lost this much value?
- A: The yen tested the 163 level against the dollar, reaching a 40-year low level unseen since 1986.
- 2. Q: Are Japan's interventions to stop the exchange rate decline working?
- A: No, the end of the negative interest rate policy and the government's direct intervention in the market failed to save the yen from weakening.
- 3. Q: What is the expectation for the future dollar/yen parity?
- A: Vikram Murarka, one of the most successful forecasters in the field, stated that they expect the Japanese yen to retreat to the 170 level against the dollar.
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