The yen has slumped past the key psychological level of ¥140 per dollar for the first time in almost a quarter of a century, a move that may extend as the divergence between U.S. and Japanese monetary policy widens.
The yen traded at ¥140.01 in the early Tokyo session Friday. And options markets show traders are betting there might be more to come, with pricing skewed toward contracts that will pay off if dollar-yen keeps rising.
The slide in the yen — the worst performer this year among Group-of-10 currencies — reflects a growing split between the Bank of Japan, which is keeping policy loose to bolster the economy, and a Federal Reserve that has been at pains to stress its inflation-fighting bona fides.