Japanese Yen Weakens Despite Government Intervention Warning
The Japanese yen weakened past 161 per US dollar in trading on Friday (June 19th). This was its lowest level since July 2024, despite Japanese authorities again signaling verbal intervention to curb the currency's weakening.
Japan's Chief Cabinet Secretary, Minoru Kihara, stated that the government is ready to respond to excessive currency movements if necessary. This statement indicates that Japanese authorities are still closely monitoring the yen's weakening, particularly as excessively sharp movements could depress purchasing power and increase import costs.
The latest weakening has seen the yen erase all gains seen since April 30th, when the Japanese government intervened heavily to support its currency. Pressure on the yen persists despite the Bank of Japan's gradual tightening cycle, including a 25 basis point interest rate hike this week to address inflationary pressures from energy prices stemming from the Middle East conflict.
Meanwhile, the US dollar continued to strengthen after the Federal Reserve held interest rates unchanged but signaled that the possibility of additional rate hikes remains open by the end of the year. The divergent policy directions between Japan and the United States are keeping the yen under pressure. As long as the Fed remains more hawkish than the Bank of Japan, the yen's potential recovery potential remains limited. (asd)
Source: Newsmaker.id
