Currency hits weakest level since 1986 as interest rate gap fuels pressure and intervention risks rise.
Image: Yeni Safak English
The Japanese yen weakened to its lowest level in nearly 39 years on Monday, briefly touching 162.29 per US dollar, as markets priced in the likelihood of higher-for-longer US interest rates.
The move marks the yen’s weakest point since December 1986, driven largely by the widening gap between US and Japanese interest rates. While the Bank of Japan has raised its policy rate to 1.00%, US rates remain significantly higher, keeping pressure on the currency.
The yen has repeatedly approached levels that previously triggered intervention, with Japanese authorities closely watching rapid depreciation. Officials have warned they may step in again if volatility becomes excessive.
Japan has intervened in currency markets multiple times in recent years to slow declines, but sustained dollar strength and fiscal concerns have continued to weigh on sentiment.
A weaker yen is expected to increase import costs for energy and food, adding further strain on households and businesses in Japan’s import-dependent economy.
