The USD/JPY pair has entered into a noticeable upward trajectory.
The Japanese yen, in tandem with the US dollar, continues its descent, with the current USD/JPY exchange rate at 148.77.
In this scenario, the yen has now reached a new low, extending its decline for seven consecutive weeks. The primary driver behind this decline is the verbal intervention by a high-ranking Japanese official.
Shunichi Suzuki, the Japanese Minister of Finance, declared today that the authorities are closely monitoring the currency market, emphasizing the importance of exchange rate stability. According to Suzuki, market movements should be reflective of the economic foundation. Despite these words, the market perceives a lack of tangible action – the yen remains notably weak, and the Bank of Japan has not signaled any readiness to alter its monetary policy.
Throughout January, the yen has been caught in a wave of devaluation, witnessing a 5% loss in value.
The inertia of the Bank of Japan is not the only concern; the aftermath of the earthquake in central Japan on January 1 has also contributed to the yen's challenges.