The yen-dollar exchange rate briefly surpassed 161 yen in the Tokyo foreign exchange market on the morning of the 28th.
On that day, the yen-dollar exchange rate rose to around 161.2 yen at about 10 a.m. before falling afterward. By around 11:30 a.m., the yen-dollar exchange rate was hovering near 160.9 yen. The rise in the yen-dollar exchange rate indicates a decline in the value of the yen.
The yen-dollar exchange rate exceeding 161 yen is the first time in 37 years and 6 months since December 1986.
The Nihon Keizai Shimbun (Nikkei) analyzed that the outlook that the United States is unlikely to cut interest rates early is acting as a pressure for dollar strength. The view that the U.S. Federal Reserve (Fed) will not rush to lower interest rates has led to strong selling of the yen. It also added that movements by import companies and institutional investors to procure dollars at the end of the quarter influenced the yen-dollar exchange rate.
On the same day, the Japanese government appointed Jun Mimura, Director-General of the International Bureau, as the successor to Finance Bureau Director Masato Kanda, who retired. Director Kanda led the authorities' intervention in the foreign exchange market in April and May of this year. Nikkei analyzed that opinions that government currency intervention would weaken due to his retirement also influenced the pressure to sell yen and buy dollars.
The market is closely watching the U.S. presidential election TV debate on that day. There is a forecast that dollar strength will continue regardless of whether President Joe Biden or former President Donald Trump wins. There is speculation that if former President Trump gains the upper hand, yen selling and dollar buying could intensify.
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