Apr 14, 2022 (enca.com) - The yen hit its lowest level against the dollar in two decades on Wednesday, extending recent falls as the gap widens between Japan's ultra-loose monetary policy and Fed tightening.
Despite being traditionally considered a safe-haven currency, uncertainty fuelled by Russia's war in Ukraine has not caused the yen to strengthen.
Instead, moves by the US Federal Reserve towards a more aggressive policy and the shock of rising oil prices in Japan -- a major importer of fossil fuels -- have pushed the currency lower, analysts say.
One dollar bought 126 yen at around 0630 GMT on Wednesday, the lowest rate since 2002.
"The Japanese yen has been one of the weakest currencies anywhere in the world this year," Dutch banking group ING said in a recent commentary.
"Driving the rally has been the perfect storm of a hawkish Federal Reserve, a dovish Bank of Japan (BoJ), and Japan's negative terms of trade shock as a major fossil fuel importer."
Earlier on Wednesday, Bank of Japan governor Haruhiko Kuroda said the bank would maintain its monetary easing policies in a bid to reach its long-held two-percent inflation target.
"Given the economy and price situation, the Bank of Japan will seek to realise its two-percent inflation target... by resiliently continuing its current powerful monetary easing," he said. ...continue reading
