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28/06/24
187
JPY Fell to Its Lowest Level Since 1986
The JPY declined to its lowest level in 38 years against the USD, while the USD was leading the currency markets and moving closer to ending the month with a 1.3 percent gain against a basket of currencies. The AUD declined by 0.35 percent, while the EUR fell by 0.13 percent and remained on track to end the month with about 1.4 percent loss.
The JPY is having a bad time, declining to a low level of 161.27 per USD, representing its lowest level since 1986, prior to turning somewhat to the upside. The currency has declined by almost 2.5 percent this month as well as over 12 percent since the beginning of 2024 against the strong USD. The sheer interest rate differentials between the United States and Japan have been hitting the JPY.
The most recent fall in the JPY has kept investors on edge as they look out for a potential intervention from the Japanese government. Markets believed that the Bank of Japan intervened on April 29 and May 1, selling some $61bn and buying JPY to push the yen up 5 percent from its lowest level in 34 years of 160.245 at the time.
On June 26, Japan’s top currency diplomat Masato Kanda said the JPY’s rapid deprecation was a “serious concern” and events are being monitored with a “heightened sense of urgency”. However, verbal intervention may not be able to save the JPY from falling.
On June 28, the Japanese government appointed financial regulation professional Atsushi Mimura as its leading currency diplomat to replace Masato Kanda who has been dealing with the JPY’s steep declines in 2024, coming up with the biggest currency intervention in history.
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