2023-04-28 16:30:45
The yen tumbled once morest the dollar on Friday and hit a 15-year low once morest the euro, penalized by the continuity of the ultra-accommodating monetary policy of the Bank of Japan (BoJ).
Around 3:15 p.m. GMT (5:15 p.m. Brussels time), the Japanese currency fell 1.62% to 136.18 yen per dollar, its lowest in a month and a half.
Against the euro, which has been on the rise recently, it lost 1.68% to 150.28 yen following falling to 150.43 yen, a level not seen since September 2008.
“The gap between the approach of the BoJ and that of the ECB (European Central Bank) has widened further,” said Fawad Razaqzada, analyst at City Index.
New BoJ Governor Kazuo Ueda has announced a thorough review of the institution’s monetary policy. But this examination will take between 12 and 18 months, explains the bank in a press release.
And in the shorter term, “the bank continues to warn in its press release that it will not hesitate to relax its policy if necessary”, underlines Ulrich Leuchtmann, analyst at Commerzbank.
Unlike the US Federal Reserve (Fed), European Central Bank (ECB) and other major central banks, the BoJ has not tightened monetary policy in the face of rising inflation across the globe.
Inflation hit 3% in 2022/23, a 41-year high, but the BoJ forecasts inflation at 1.8% in FY 2023/24 and 2% for 2024/25.
“These projections do not support an imminent tightening of monetary policy,” commented Derek Halpenny, analyst at MUFG.
Result, “the weakness of the yen is not surprising”, he adds before recalling that since the long Japanese deflation began in the 1990s, “the BoJ has struggled to achieve” its objective of 2% d ‘inflation.
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