Yen reaches its lowest value in the last 24 years

The yen continues its downward path against the main currencies as a result of a growing divergence between the monetary policy of the Bank of Japan and the rest of the major central banks, which has plunged the Japanese currency to its lowest level since 1998 against the dollar.

The US currency was exchanged for 135.19 yen, its best exchange rate since October 1998, after the Bank of Japan reiterated that it will continue to maintain its current monetary policy to achieve the medium-term inflation target of 2%. While the Federal Reserve and the Bank of England have already begun to raise rates to address inflation rates at their highest since the 1980s, and the European Central Bank (ECB) promised to undertake its first increase in the price of money in July in 11 years.

The depreciation of the yen’s exchange rate caused Japan’s monetary authorities to release a rare joint statement last week expressing concern about the loss of value of the Japanese currency and the importance of exchange rate stability.

“It is important that the exchange rate remains stable in line with the fundamentals, and rapid fluctuations are not desirable,” said the Ministry of Finance, the Financial Services Agency and the Bank of Japan after a meeting to exchange information and points of view of recent market trends and their impact on the economy.

In this sense, the Japanese authorities acknowledged their concern “over the rapid depreciation of the yen“, expressing their willingness to collaborate closely to closely monitor trends in the foreign exchange market and their impact on the economy and prices.

K. Tovar

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Source: El Confidencial