Japanese yen has been at its weakest against the US dollar
Since October 2022, the Japanese yen has depreciated by 0.3% against the US dollar, falling to 150.32, a level never seen before.
At Wednesday's close, the exchange rate against the US dollar fell by 0.2% to 150.25. It is well known that 150 is an important level for Japanese authorities, and the Bank of Japan has repeatedly stated that it does not rule out any options to curb excessive volatility. On Monday, the yen briefly fell below 150 but quickly rebounded under pressure from US dollar selling related to options and algorithmic trading. On October 3rd, it touched 150.16 and then sharply reversed, sparking speculation that Japan had intervened in the market.
In line with past situations, such as in October 2022, when the yen depreciated to the 150 level, Japan injected a record 6.3 trillion yen (approximately $42 billion) to support the currency. The country's top currency official, Masato Kanda, subsequently stated that if there is excessive volatility in the currency market, Japan will take appropriate measures in the hope of stabilizing the currency to reflect fundamentals.
Meanwhile, the yield on US 10-year Treasury bonds has risen by nearly 14 basis points to 4.96%, while Japan's corresponding yield is 0.85%. This difference puts pressure on the yen. Despite this, speculation about yen depreciation putting pressure on the Bank of Japan to adjust monetary policy and the possibility of an escalation of the Middle East conflict boosting safe-haven demand continue to make traders cautious.
US 10Y
JP10Y
According to a weekend report, Japanese central bank officials are considering whether to adjust their yield curve control plan as domestic long-term interest rates rise in sync with the United States.
At Wednesday's close, the exchange rate against the US dollar fell by 0.2% to 150.25. It is well known that 150 is an important level for Japanese authorities, and the Bank of Japan has repeatedly stated that it does not rule out any options to curb excessive volatility. On Monday, the yen briefly fell below 150 but quickly rebounded under pressure from US dollar selling related to options and algorithmic trading. On October 3rd, it touched 150.16 and then sharply reversed, sparking speculation that Japan had intervened in the market.
In line with past situations, such as in October 2022, when the yen depreciated to the 150 level, Japan injected a record 6.3 trillion yen (approximately $42 billion) to support the currency. The country's top currency official, Masato Kanda, subsequently stated that if there is excessive volatility in the currency market, Japan will take appropriate measures in the hope of stabilizing the currency to reflect fundamentals.
Meanwhile, the yield on US 10-year Treasury bonds has risen by nearly 14 basis points to 4.96%, while Japan's corresponding yield is 0.85%. This difference puts pressure on the yen. Despite this, speculation about yen depreciation putting pressure on the Bank of Japan to adjust monetary policy and the possibility of an escalation of the Middle East conflict boosting safe-haven demand continue to make traders cautious.
US 10Y
JP10Y
According to a weekend report, Japanese central bank officials are considering whether to adjust their yield curve control plan as domestic long-term interest rates rise in sync with the United States.