Tokyo, 13 June, /AJMEDIA/
The yen tumbled to the 135 zone against the U.S. dollar on Monday, hitting a fresh 20-year low in anticipation of a further widening of the interest rate gap between Japan and the United States.
The yen sank to its lowest level since February 2002 after U.S. consumer price data for May, released Friday, caused speculation that the Federal Reserve may conduct aggressive rate hikes, fueling the divergence in monetary policy between the two countries.
At 10:30 a.m., the dollar fetched 134.88-89 yen compared with 134.35-45 yen in New York and 133.59-62 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at $1.0483-0487 and 141.31-38 yen against $1.0504-0514 and 141.27-37 yen in New York and $1.0625-0626 and 141.95-99 yen in Tokyo late Friday afternoon.
Market participants have been buying the dollar in recent months on the back of contrasting approaches by the Bank of Japan and the U.S. Federal Reserve, the latter of which decided in March to raise key interest rates for the first time since 2018 to tame inflation.
The Japanese central bank has maintained its powerful monetary easing, with BOJ Governor Haruhiko Kuroda reiterating last week that the bank will stay the course to attain its 2 percent inflation goal in a sustainable way.
While a weaker yen boosts exporter profits earned overseas when repatriated, it could also slow domestic economic growth with higher imported energy and food prices restraining consumer spending.
