Japanese yen drops near 4-m low

The yen hovered near a four-month low against the US dollar to reach 151.56 level with intervention concerns looming as it approaches 151.94, according to Reuters on Wednesday.

The Japanese currency also weakened a 16-year low against the euro to record 164.66 and against the pound sterling to 192.75, its lowest since 2015.

Traders expect Japan’s monetary policy to remain accommodative despite the Bank of Japan’s (BOJ) recent rate hike.

Currency strategist Christopher Wong noted the focus on the 152 level for dollar/yen, anticipating possible intervention if it rises further. The near-term movement of dollar/yen will be influenced by US rates, with the Federal Reserve decision awaited.

The BOJ’s shift from negative interest rates marked a significant change in monetary policy, causing the yen to drop one per cent against the dollar.

The yen carry trade remains a factor, with low Japanese rates making it a preferred funding currency.

The Australian dollar reached a three-week high against the yen at 98.94, reflecting ongoing carry trade dynamics. Analysts expect the yen to weaken further if other central banks delay rate cuts.