Yen hits lowest rate against dollar since 1998

Yen hits lowest rate against dollar since 1998
Yen hits lowest rate against dollar since 1998

One US dollar was higher than 140 yen for the first time since 1998 – AFP/Archives

The yen’s price tumbled on Thursday, reaching its lowest in 24 years against the dollar, which benefited from its status as a security asset in an altered market and also advanced against the euro and the pound sterling.

The Japanese currency, which also suffers from a very accommodative policy of the Bank of Japan (BoJ, central bank), was quoted at 140 yen per dollar on Thursday afternoon.

The devaluation of the Japanese currency, which lost more than 20% in one year, is due, according to exchange traders, to the very flexible monetary policy of the BoJ.

Unlike the United States and Europe, where inflation soared and reached over 10% in the United Kingdom, the price increase in Japan was 2.4% in the last 12 months in July, an index very close to the target of 2 % of major central banks, which led the BoJ to passivity.

However, the yen’s sharp fall could make the currency entity move. “Previously, when the Bank of Japan intervened to buy yen, it was around these levels. [de cotação]”, explained to AFP David Forrester, head of foreign exchange at Crédit Agricole in Hong Kong.

The passivity of the Japanese central bank contrasts with the firm attitude of the US Federal Reserve (Fed, central bank), which has indicated on several occasions that it will continue to raise interest rates to fight inflation.

“Last week’s comments by Fed Chairman Jerome Powell, who promised to act quickly to control inflation without worrying about its effects on the US economy”, benefit the dollar, opine analysts at financial services firm OFX.

Thus, the performance of other major currencies against the US dollar was not much better either: the euro was quoted at 0.99 dollar and the pound sterling at 1.15 dollar this Thursday afternoon.



The article is in Portuguese

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