Zhitong Finance APP learned that the yen fell to a 24-year low after Bank of Japan Governor Kuroda Haruhiko vowed to maintain loose monetary policy to support economic recovery, which triggered speculation about whether the Japanese authorities would intervene again to support the yen.
After Kuroda Haruhiko delivered a speech on Wednesday, the yen exchange rate against the US dollar quickly fell to 146.86, and the exchange rate fell below the 145.90 that had previously prompted Japan to use nearly $20 billion in September to buy the yen. This is also the first time Japan has intervened in the foreign exchange market since 1998 to support the yen.
Kuroda Haruhiko said at the annual meeting of the International Finance Association in Washington: "We must continue to relax monetary policy until we achieve the 2% inflation target in a sustainable and stable manner." "The economy is still recovering from the epidemic, so we must continue to support the economic recovery."
It is reported that earlier this week, Japanese Prime Minister Kishida Fumio also expressed support for the Bank of Japan's ultra-loose monetary policy, although the yen fell sharply this year.
Bank of Japan is one of the few central bank in the world to maintain the lowest interest rate, while most other central banks are making massive hikes in rate hikes to fight inflation and keeping pace with the Fed’s austerity policy.
Kuroda's remarks once again stress that the Bank of Japan will not change its easing policy in the short term. This has exacerbated policy divisions between the Bank of Japan and the Federal Reserve. Interest rate markets bet the Fed will raise at least 150 basis points by the first quarter of next year.
The spread between the United States and Japan widening means the yen will face more pain, especially as strategists expect the dollar to strengthen further as the Fed continues to seek to curb inflation.
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