Yen hits 34-year low against dollar

TOKYO  -  The yen hit a 34-year low against the dol­lar on Wednesday, just over a week after the Bank of Japan announced a much-an­ticipated interest rate hike in a shift away from years of ultra-loose monetary policy.

The unit weakened to 151.97 per dollar, its softest since 1990, raising speculation that authorities will intervene in markets to prop up the currency. But its value soon recovered to levels of around 151.72. The drop came after a top central bank official suggested it would continue to pursue an accommodative policy for the time being, echoing previous comments from the BoJ.

Over the past two years, the yen has sharply weakened from levels of around 115 against the dollar before Russia’s in­vasion of Ukraine. While central banks around the world aggressively hiked rates to tackle soaring inflation caused by the war in Ukraine and other factors, the Bank of Japan stuck to its ultra-loose poli­cies, driving down the yen. But last week the bank finally took a step away from its monetary stimulus programme — hiking rates for the first time since 2007. The yen has continued to slide since then, however, and on Monday a Japanese finance minis­try currency diplomat hinted at potential intervention in the currency market.

“We can’t tolerate excessive movement based on speculation, which has a huge negative effect on the national economy,” Masato Kanda said, adding, “We will take appropriate measures against exces­sive movement without ruling out any means.” Wednesday’s drop came after Na­oki Tamura, a BoJ board member, report­edly told business leaders in northern Ja­pan that “slow but steady progress” was needed on scaling back the central bank’s long-standing ultra-easy policy.

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