Yen slumps 1% against Singdollar, greenback after BOJ hikes rates
It is trading at 123.4 per Singdollar and 158 per US dollar as at 4.11 pm in Asia
The Japanese yen experienced a decline of more than 1% against both the Singdollar and the US dollar following the Bank of Japan's (BOJ) decision to increase interest rates by 25 basis points on September 18. This rate hike marked a new high in 31 years for Japan's central bank, driven by concerns over inflation. The vote at the BOJ was split 7-2, with board members Toichiro Asada and Ayano Sato dissenting, which contributed to an initial period of caution among traders.
Analysts noted that the lack of an updated outlook report from the BOJ complicated the hawkish message, leading to some volatility in the currency markets. The yen had already weakened earlier in the week due to the US Federal Reserve's own interest rate hikes, but the BOJ's action intensified the downward pressure. Despite the rate hike, Japan's Nikkei 225 index managed to close 1.4% higher, while the Topix ended 0.1% lower.
The decision to intervene in the yen market by the US Treasury, which had not occurred since 1998, initially helped to bolster the currency, reaching levels of approximately 120 to 121 yen against the Singdollar in early August. However, this support was short-lived as the yen resumed its downward trend shortly after.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
