(Reuters) – The yen fell to its weakest level against the dollar since 1990 on Wednesday, with markets on alert for any sign of intervention by Japanese authorities to prop up their currency.
The dollar reached 155.17 yen, its highest value since 1990, before falling again in choppy trading, a sign of market nervousness around the 155 level. The US currency was trading at 154.97 yen, with increase of 0.09%
The yen’s decline came after a string of strong U.S. inflation data lifted the dollar to five-month highs and reinforced expectations that the Federal Reserve is unlikely to be in a rush to cut interest rates this year.
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The fall of the yen against the dollar revived expectations of exchange rate intervention. Japanese Finance Minister Shunichi Suzuki and other officials have said they are watching currency movements and will respond as necessary.
The strong dollar prevailed at the spring meetings of the International Monetary Fund and the World Bank last week in Washington, and the United States, Japan and South Korea issued a rare joint statement on the issue.
Speaking after the G20 financial leaders’ meeting in Washington, Bank of Japan Governor Kazuo Ueda said the Japanese central bank could raise interest rates again if the falling yen significantly raises inflation, highlighting the dilemma facing the weak currency has become for the authorities.
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The Bank of Japan concludes its monetary policy meeting on Friday.
Tags: Japanese yen reaches weakest level dollar raises market alert
