The yen fell to a fresh 24-year low in the 140-to-US dollar zone
The Japanese yen weakened to a fresh 24-year low in the 140-per-dollar area in New York on Thursday, worried by growing speculation that the interest rate gap between the United States and Japan will widen.
The Japanese currency continued to slide further against the dollar after hitting its weakest level since September 1998 in the 139 zone in Tokyo.
After hovering around the ¥140 line throughout Thursday and briefly touching ¥140.23, the dollar traded at ¥140.15-¥25 at 5:00 pm in New York. It hit 139.28-29 yen at 5pm in Tokyo and 138.91-139.01 yen in New York late on Wednesday.
Investors sold the yen against the dollar after members of the U.S. Federal Reserve’s policy-setting committee suggested they would continue to raise interest rates to fight inflation, creating a stark contrast to Japan’s ultra-loose monetary policy. The wide gap between US and Japanese interest rates prompted investors to sell the yen.
US economic data released on Thursday showed strong demand for labor and firmness in the country’s economic activities, leading investors to believe the central bank will continue to tighten its monetary policy.
Cleveland Federal Reserve President Loretta Mester said Wednesday that the U.S. central bank should raise its benchmark interest rate to above 4 percent by early next year from the current 2.25-2.5 percent and keep it there for some time. to fight inflation.
Mester also said he does not “expect the Fed to cut the Fed rate next year,” echoing the hawkish stance that many Fed officials have taken recently.
A financial monitor in Tokyo on September 1, 2022 shows the dollar breaking above the 140 yen line. (Kyodo)
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