In the foreign exchange market on 14 August, the yen depreciated against the United States dollar, at one point touching its lowest level since November 2022 at around 145 yen to the dollar. The market has become more wary of high prices in the United States, while investor confidence in selling the yen has increased due to the Bank of Japan’s continued negative interest rate policy.
After hitting 145.07 yen per dollar as a recent low on 30 June, the yen turned back up out of caution over the Bank of Japan’s revised policy and expectations of a slowdown in U.S. prices.
However, by July 28 after the Bank of Japan adjusted its policy, it is widely believed that Japan to the abolition of negative interest rate policy is still a long way to go. In addition, the view that a rate cut by the Federal Reserve (FRB) is a long way off prompted buying of the US dollar as US price indicators released last week showed rising inflation again after 12 months.
As the yen depreciated to its lowest point this year, market expectations of intervention in the FX market by the Japanese government and the Bank of Japan intensified.2022 Exchange rate interventions to buy yen and sell dollars were made in September at around ¥145, and the market is likely to be volatile in response to the authorities’ comments.