Yen/Dollar Exchange Rate Falls to 156 Yen... Impact of Trump and Japanese Minister's Criticism of Yen Depreciation

The yen/dollar exchange rate fell nearly 2 yen in the foreign exchange market, dropping to the 156 yen range. Foreign media analyzed that the remarks by Japanese Minister Taro Kono and former U.S. President Donald Trump pointing out the yen depreciation phenomenon influenced the exchange rate.

[Image source=Yonhap News]

According to Kyodo News and Nihon Keizai Shimbun (Nikkei) on the 17th, the yen/dollar exchange rate was 158.2 yen around 2 p.m. that day but dropped to 156.1 yen around 6 p.m. The yen's value rose to its highest level in about a month since mid-June.

Nikkei analyzed that the background of the yen's strength was Japanese influential politician Digital Minister Taro Kono's statement in an interview with Bloomberg News reported that day, saying, "The exchange rate is a problem for Japan, and the yen is too cheap," and that he would demand a rate hike from the Bank of Japan, Japan's central bank.

It added that former President Trump’s remark in a Bloomberg Businessweek interview released on the 16th (local time), stating that he finds it difficult to tolerate yen weakness, also influenced the exchange rate changes.

Meanwhile, Masato Kanda, Administrative Vice Minister of Finance who directs Japan's exchange rate policy, pointed to speculation as the main cause of yen weakness in an interview reported by Kyodo News. He emphasized that if there is excessive exchange rate fluctuation due to speculation, the government will intervene in the market.