USD-JPY Exchange Rate 'Fluctuates'... Surpasses 160 Yen for the First Time in 34 Years, Then Repeats Ups and Downs

Record-Low Yen Weakness Continues

On the 29th, the yen-dollar exchange rate briefly surpassed 160 yen per dollar in the foreign exchange market. This is the first time in 34 years since April 1990.

According to Kyodo News and Japan's public broadcaster NHK, the yen-dollar exchange rate exceeded 160 yen per dollar in the Asian foreign exchange market on that day. The yen-dollar exchange rate moved around the early 158 yen per dollar range in the morning before surging to the 160 yen range around 10:30 a.m. Japan time. A higher yen-dollar exchange rate means the value of the yen has fallen.

As the yen continues to weaken, the yen-dollar exchange rate is displayed on the status board in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul, on the afternoon of the 29th. [Image source=Yonhap News]

The yen-dollar exchange rate was around the 140 yen level as recently as January 2 this year but has continued a steep upward trend. In particular, after the Bank of Japan, Japan's central bank, kept the benchmark interest rate unchanged at the Monetary Policy Meeting on the 26th of this month, the exchange rate rose sharply. The yen-dollar exchange rate, which was in the 155 yen range before the announcement of the Monetary Policy Meeting results, reached the 160 yen level within three days.

Kyodo News reported, "Today was a holiday in Japan, so the yen was traded in the Asian market," adding, "Even with low trading volume, the pace of selling the yen accelerated."

However, in the afternoon of the same day, the yen-buying movement strengthened, causing the yen-dollar exchange rate to plummet to the 155 yen range in a short time. It then rose again to the 157 yen range before falling more than 2 yen to the late 154 yen range around 4:30 p.m., experiencing fluctuations. As the yen depreciation accelerated, there were speculations in the market that the Japanese government and the Bank of Japan might have engaged in "direct intervention" by purchasing yen.

Kyodo News, citing market sources, reported, "There is a possibility that the Japanese government and the Bank of Japan intervened in the foreign exchange market."