The yen tumbled to its weakest level since November after the U.S. Federal Reserve signaled it may have to raise interest rates further, fueling concern that the Bank of Japan’s ultraloose policy stance will fail to anchor the currency.
The yen fell as much as 1% to ¥141.50 per dollar, with the slide not halted by Chief Cabinet Secretary Hirokazu Matsuno saying excessive movements weren’t desirable. The yen has now surpassed last month’s lows that led the nation’s top currency official, Masato Kanda, to say the government would take action if needed.
The stance from Fed officials on Wednesday stands in sharp contrast to BOJ policymakers, who have stuck with monetary easing even as most global peers tighten. The Fed indicated at its meeting that at least two more rate hikes might be necessary this year, while almost all economists surveyed by Bloomberg see the BOJ leaving its ultraloose policy unchanged at its next meeting on Friday.
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