The Japanese yen broke the crucial 144 level against the greenback in Asian trading on Wednesday, as the dollar continued its rally ahead of the US dollar release federal reserve‘s “Summary of Commentary on Current Economic Conditions”, commonly known as its beige book.
The Dollar Index, a measure of the dollar’s strength against a basket of currencies, was up 0.37% at 110.63 at the time of writing.
Chief Cabinet Secretary Hirokazu Matsuno said he was concerned about the yen’s rapid, unidirectional movements and that Japan must take necessary measures if they continue, the report said Bloomberg.
Price Movement: The currency has depreciated more than 19% this year. Another sell-off in Treasuries in September has widened the US-Japan yield gap, leading to a strengthening of the dollar and pushing the yen to a 24-year low, Bloomberg reported.
Japan last intervened to strengthen the yen in 1998 as much of Asia was rocked by a regional financial crisis.
Expert Take: Mari Iwashita, Chief Market Economist at Daiwa Securities Co Bloomberg told the Treasury Department and the Bank of Japan (BOJ) are likely to believe that the current phase is clearly the strength of the dollar and not the yen’s problem.
“This means that unfortunately there is no sense of urgency for intervention or a need for the BOJ to streamline policy,” Iwashita said.
