{"id":49718,"date":"2022-06-14T03:36:20","date_gmt":"2022-06-14T03:36:20","guid":{"rendered":"https:\/\/harchi90.com\/yen-slides-to-24-year-low-against-dollar\/"},"modified":"2022-06-14T03:36:20","modified_gmt":"2022-06-14T03:36:20","slug":"yen-slides-to-24-year-low-against-dollar","status":"publish","type":"post","link":"https:\/\/harchi90.com\/yen-slides-to-24-year-low-against-dollar\/","title":{"rendered":"Yen slides to 24-year low against dollar"},"content":{"rendered":"
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Issued on:

\n Tokyo (AFP) – <\/span>The yen plunged to its lowest level against the dollar since 1998 on Monday as sky-high US inflation fuels a widening monetary policy gap between Japan and the world’s largest economy. <\/p>\n

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Japan’s currency has been weakening for months, accelerated by the US Federal Reserve’s aggressive monetary tightening to tackle soaring inflation caused by the war in Ukraine and other factors.<\/p>\n

But unlike the Fed, the Bank of Japan has said it will stick with its long-standing monetary easing program which it hopes will lead to stable growth.<\/p>\n

The increasingly polar policies have strengthened the greenback, and on Monday one dollar bought 135.19 yen.<\/p>\n

It’s a level not seen since October 1998 during the Asian currency crisis, and marks a dramatic drop from January rates of around 115 yen per dollar.<\/p>\n

“The ongoing backdrop to the yen’s fall is the growing gap between long-term interest rates in Japan and the United States,” Takahide Kinouchi, executive economist at Nomura Research Institute, said in a recent commentary.<\/p>\n

And as higher oil prices fuel US inflation, “expectations are growing stronger that aggressive US monetary tightening will continue for the time being, causing US yields to rise further.”<\/p>\n

US consumer prices for May hit a new four-decade high, rising 8.6 percent and topping what economists thought was the peak in March.<\/p>\n

In Japan however, inflation has only just hit the central bank’s long-term target of two percent.<\/p>\n

And while the figure represents a seven-year high, the BoJ sees current inflationary pressures as temporary, and believes its monetary policy is necessary to produce more long-lasting growth.<\/p>\n

Benefits for tourism, exporters<\/h2>\n

As the war in Ukraine pressures global fuel and food prices, household brands from Uniqlo to 7-Eleven have anounced price hikes, with budget sushi chain Sushiro causing shock when it said it would no longer offer plates for 100 yen ($ 0.75).<\/p>\n

But BoJ governor Haruhiko Kuroda said last week that “monetary tightening is not at all a suitable measure” for Japan, whose economy is still recovering from the pandemic, according to Kyodo News.<\/p>\n

He also pointed to the benefits of a weaker yen for Japanese exporters, whose overseas profits are inflated when they are repatriated and have seen their stock prices rise in recent months.<\/p>\n

The weaker yen could also be a boon for the tourism sector, with Japan cautiously reopening to foreign visitors now allowed in on group tours.<\/p>\n

“The weak yen helps to support Japan’s export sector directly, and a weaker exchange rate also contributes to looser monetary conditions domestically,” said Alvin Tan, head of Asia forex strategy at RBC Capital Markets in Singapore.<\/p>\n

“These will help drive the economic recovery further,” he told AFP.<\/p>\n

Although “higher import prices will negatively affect consumers” and the weaker yen will contribute to inflation, particularly given Japan’s reliance on energy imports, this could also be “seen as a positive”, he said.<\/p>\n

“It could help to deepen more persistent inflation expectations in a country that has suffered under deflation for so many years.”<\/p>\n

The yen’s trajectory may depend on how the US Fed acts in its September meeting, with worse-than-expected inflation figures for May raising expectations of further rate hikes.<\/p>\n

But “there is still a lot of time left until then,” said Kinouchi, and other factors may also be at play including energy prices rising further after a European Union ban on most Russian oil imports.<\/p>\n

\u00a9 2022 AFP<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Issued on: 06\/13\/2022 – 06:56 Tokyo (AFP) – The yen plunged to its lowest level against the dollar since 1998 on Monday as sky-high US inflation fuels a widening monetary policy gap between Japan and the world’s largest economy. Japan’s currency has been weakening for months, accelerated by the US Federal Reserve’s aggressive monetary tightening …<\/p>\n

Yen slides to 24-year low against dollar<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[8],"tags":[],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/s.france24.com\/media\/display\/247ce35e-ead5-11ec-9ea2-005056a9a7b9\/w:1280\/p:16x9\/37593653a4dd92753183f4ea5586cdf0913dd5f0.jpg","_links":{"self":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/49718"}],"collection":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/comments?post=49718"}],"version-history":[{"count":0,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/49718\/revisions"}],"wp:attachment":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/media?parent=49718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/categories?post=49718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/tags?post=49718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}