Tokyo, 27 June, /AJMEDIA/
The yen continued to fall against the U.S. dollar to the upper 160 range on Wednesday, hitting its lowest level in over 37 years in New York despite heightened vigilance about another market intervention by Japan to slow its rapid drop.
At 5 p.m. in New York, the Japanese currency was traded at 160.78-88 against the dollar, its lowest level since December 1986, compared with 159.89-91 late Wednesday in Tokyo.
The embattled yen also plunged against the euro the same day, briefly hitting 171.79, the lowest level since the European currency was introduced in 1999. The euro was quoted at 171.64-74 yen at 5 p.m. in New York.
Japan’s top currency diplomat Masato Kanda called the yen’s rapid depreciation a “serious concern” and vowed to take necessary action against excess volatility that does not reflect economic fundamentals.
Although his remarks led to some dollar selling, the momentum of the yen’s decline has not subsided after crossing the psychological barrier of 160.
The Japanese currency depreciated past the 160.24 hit on April 29, a level that likely prompted Japan to intervene by buying the yen for U.S. dollars.
“We do not have specific levels in mind, but we are determined to respond to rapid and disorderly movements led by speculators. In this context, the yen’s recent rapid depreciation is a serious concern,” Kanda, vice finance minister for international affairs, told reporters.
“We are ready to respond to rapid fluctuations whenever needed,” he said, describing the yen’s fall as “one-sided.” “We are monitoring market developments with a heightened sense of urgency.”
The dollar has been sought on the prospect that the Federal Reserve will keep interest rates elevated for longer than expected on the back of recent U.S. data indicating a solid economy.
The Bank of Japan, for its part, raised its policy rate in March, but it remains around zero percent, leaving a wide interest rate gap between the two nations.
The yen’s decline came a day after Japan and South Korea expressed “serious concerns” about the rapid depreciation of their currencies.
Last week, the United States put Japan back on its currency manipulator watch list, raising speculation that it may be more difficult for authorities to step into the currency market, dealers have said.
While no daily breakdowns have been released, the Finance Ministry has said it spent about 9.79 trillion yen ($61 billion) between April 26 and May 29 to slow the yen’s rapid fall against the dollar.
© KYODO
