Following the Bank of Japan's monetary policy announcement, the yen's depreciation accelerated, pushing the yen-dollar exchange rate above 158 yen for the first time in 34 years.
According to NHK and Nihon Keizai Shimbun (Nikkei) on the 27th, the yen-dollar exchange rate rose to 158.4 yen per dollar during trading in the New York foreign exchange market on the 26th (local time). The yen's value falling to the 158 yen level per dollar is the first occurrence since May 1990.
This trend in the yen accelerated further after the Bank of Japan's Monetary Policy Meeting announcement. When the Bank of Japan decided to maintain its previous monetary policy, including keeping interest rates unchanged at the Monetary Policy Meeting held on the 26th, the yen-dollar exchange rate surpassed 156 yen in the Tokyo foreign exchange market during the day. After the press conference by Kazuo Ueda, Governor of the Bank of Japan, the rate broke through 157 yen.
Governor Ueda stated at the press conference, "Currently, the weak yen is not significantly affecting the underlying inflation rate," and added, "The accommodative financial environment will continue for the time being."
These remarks came amid a widening interest rate gap between the U.S. and Japan, with continued moves to sell yen and buy dollars, reinforcing expectations that an early rate hike by the Bank of Japan is unlikely. However, given the recent rapid pace of yen depreciation, the possibility of intervention by Japanese authorities in the market remains.
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