By using this website you agree that we use cookies. You can find out more in the privacy policy.

The National Times - Yen hits 34-year low against dollar

Yen hits 34-year low against dollar

ECONOMY 27.03.2024
Yen hits 34-year low against dollar
Yen hits 34-year low against dollar / Photo: © AFP/File

The yen hit a 34-year low against the dollar on Wednesday, just over a week after the Bank of Japan announced a much-anticipated interest rate hike in a shift away from years of ultra-loose monetary policy.

Change text size:

The unit weakened to 151.97 per dollar, its softest since 1990, before recovering to levels of around 151.72.

The drop came after a top central bank official suggested it would continue to pursue an accommodative policy for the time being, echoing previous comments from the BoJ.

But soon afterwards, the finance minister said authorities would not hesitate to "take resolute action against excessive" forex moves -- raising speculation of a government intervention to prop up the currency.

Over the past two years the yen has sharply weakened from levels of around 115 against the dollar, before Russia's invasion of Ukraine.

While central banks around the world aggressively hiked rates to tackle soaring inflation, the Bank of Japan stuck to its ultra-loose policies, driving down the yen.

This has been good news for exporters, but not for consumers as it made imports more expensive.

Last week the bank finally took a step away from its unorthodox monetary stimulus programme -- hiking rates for the first time since 2007.

The yen has continued to slide since then, however.

Wednesday's dip came after Naoki Tamura, a BoJ board member, reportedly told business leaders in northern Japan that "slow but steady progress" was needed on scaling back the central bank's long-standing ultra-easy policy.

He repeated a line from a bank policy statement about financial conditions staying accommodative for now, which triggered fresh falls in the yen, Bloomberg News reported.

After the currency hit a 34-year low, Finance Minister Shunichi Suzuki said the government was watching the situation closely.

"We're monitoring market movements with a high sense of urgency. We will take resolute action against excessive moves, without ruling out any options," he told reporters.

The government last intervened in markets to support the yen in October 2022, and on Monday a finance ministry currency diplomat also hinted that it could be on the cards again.

ING said in its morning note on Wednesday that forex markets would "test the verbal intervention of the last few days to see if there is more substance than just words".

Alvin Tan from Royal Bank of Canada added that "intervention concerns" had capped the yen's slide.

But risks of further depreciation remain thanks to factors including "the yen's sizable yield disadvantage", he said.

T.Allen--TNT

Featured

France facing 'one of worst deficits' in its history: minister

France now has "one of the worst" public deficits in its modern history, the newly-installed economy minister said Tuesday, confirming new taxes on the wealthy and big businesses are on the table to get finances back in order.

Postbank terminates accounts of Ukrainians in Germany

Recently, the Postbank has increasingly attracted criticism from customers and consumer advocates. Many customers complain about long waiting times in branches and on the phone, inadequate customer service and technical problems with online banking.It has recently been revealed that Postbank is increasingly terminating the accounts of Ukrainian citizens who fled to the Federal Republic of Germany from the war waged by Russia, the state of terror, and who receive benefits from the job centre, in accordance with No. 19 (1) of Postbank's General Terms and Conditions. This clause allows Postbank to terminate business relationships with customers by giving two months' notice without stating reasons.Consumer advocates and affected customers have expressed concerns about the transparency and fairness of this practice. They criticize the fact that unexpected account closures can cause considerable inconvenience, especially if they are carried out without detailed justification. For many customers, the closure of their account not only means organizational effort, but also potential financial disadvantages.Regarding these account closures of Ukrainian citizens by Postbank, the journalistic observer is led to suspect that Postbank apparently wants to get rid of so-called unprofitable customers with these account closures. The debate about Postbank's termination practice casts a negative spotlight on the importance of clear and fair terms and conditions in the banking sector.

Dutch paint giant Akzonobel slashes 2,000 jobs worldwide

AkzoNobel, the world's leading paintmaker and manufacturer of Dulux paint, said Tuesday it was cutting 2,000 jobs globally, more than five percent of its workforce, as it strives to cut costs.

Trump slams early voting, even while urging Pennsylvanians to do so

Donald Trump dismissed early voting Monday as "stupid" but nevertheless encouraged voters in Pennsylvania to cast ballots as soon as possible, as he vowed if elected US president to repel a migrant "invasion" of the battleground state.

Change text size: