The yen’s exchange rate began on the 13th as the U.S. long-term interest rate rose and the U.S.-Japan interest rate gap widened, leading to selling yen and buying dollars.
In the Tokyo foreign exchange market, the yen’s exchange rate was 1 dollar = 134.75 to 134.77 yen at 8:30 a.m., down 1.16 yen from 5 p.m. on the 10th.
The yen’s exchange rate was 1 dollar = 134.80 yen just before 8:30 p.m., the lowest in 20 years and 4 months since February 2002.
Against the backdrop of accelerating inflation, the U.S. Federal Reserve (Fed) is actively tightening its financial policies, raising long-term interest rates, and speculation that the U.S.-Japan interest rate gap is widening is selling yen and buying dollars.
The U.S. Consumer Price Index (CPI) in May, which came out over the weekend, also exceeded market expectations, spreading the prospect that the Fed will sharply raise its key interest rate to curb inflation.
As of 9:31 a.m., the yen exchange rate was 1.15 yen and 0.86 percent lower at 1 dollar = 134.74 to 134.75 yen.
On the 10th (local time), the yen fell for six consecutive trading days and closed at 1 dollar = 134.35 to 134.45 yen, down 0.05 yen from the 9th.
As the U.S. and European stock markets weakened, buying of the low-risk currency, the yen, took the lead. However, as the U.S. long-term interest rate rose due to the Fed’s financial tightening, yen sales and dollar purchases aimed at widening the U.S.-Japan interest rate gap flowed in.
In the Tokyo foreign exchange market, the yen is rising against the euro. At 9:30 a.m., 1 euro = 141.41 to 141.44 yen, up 0.54 yen from the previous day.
The New York stock market plunged over the weekend on the observation that the Fed is accelerating the pace of interest rate hikes in response to high inflation.
As it becomes difficult to take the risk of investment management, the yen purchase, a low-risk currency, is dominant over the euro.
The euro is falling against the dollar. At 9:30 a.m., 1 euro = 1.0492 to 1.0494 dollars, down 0.0133 dollars from the previous day.
Concerns that the European Central Bank’s financial tightening puts downward pressure on the European economy are putting pressure on the euro.