Yen Sinks to 34-Year Low Past 160 Per Dollar

AFP/APP

Hong Kong: The yen sank to a new 34-year low past 160 per dollar on Monday after a forecast-beating US inflation reading dented expectations for US interest rate cuts this year.

The greenback bought 160.17 yen in morning trade — its weakest since 1990 — fanning speculation that Japanese authorities would step in to support their currency.

Friday’s forecast-beating reading on the personal consumption expenditures (PCE) index came after the Bank of Japan (BoJ) refused to tighten monetary policy further at its meeting last week.

 Officials have repeatedly said they are ready to step in if there are wild movements in the exchange rate, citing speculators as a key issue.

However, observers were sceptical that a first intervention since late 2022 would have much of an impact. “Expectations of intervention having a sustained impact may disappoint given macro fundamentals do not support a sudden shift to a hawkish monetary stance,” said National Australia Bank’s Tapas Strickland.

The advance in the US PCE followed a third straight jump in the consumer price index.