There was a brief period in which the Japanese yen was worth 147.66 U.S. dollars, but it has since recovered.
The Japanese government will take “necessary measures,” according to the Minister of Finance, Shunichi Suzuki. This is in response to the volatility of the Japanese yen.
In an extremely unusual step, Japan spent about $20 billion (£17.6 billion) to prop up the ailing currency of the nation last month.
“The extreme volatility in the currency market caused by speculative actions is not something that we can allow. We are keeping a very close eye on the fluctuations in the currency markets “Mr. Suzuki made these comments to the press after attending a meeting of the G7 finance ministers in Washington, DC.
Following the Japanese yen’s new 24-year low versus the dollar, the Japanese authorities interfered in the currency market for the first time since 1998. This action marked the first time that Japanese officials had engaged in the currency market since 1998.
However, economists have cautioned that initiatives such as these would have little impact as long as interest rates in Japan remain far lower than those in the United States.
In recent months, the Japanese yen has been subjected to a growing amount of pressure, which can primarily be attributed to the very different strategy followed by the Bank of Japan (BOJ) in contrast with that of the Federal Reserve in the United States.
Official numbers revealed on Thursday that consumer prices in the United States climbed more than projected the previous month. This is a hint that the struggle against inflation in the greatest economy in the world is not yet ended.
The annual rate of inflation, which measures the pace at which prices are increasing, was 8.2% in the 12 months leading up to September, which is a decrease from 8.3% in August.
The Federal Reserve’s attempts to calm inflation are pushing up the value of the dollar as well as the costs of borrowing money throughout the world. As a result, rising consumer prices in the United States are receiving a lot of attention.
The Federal Reserve of the United States has been quite proactive in increasing interest rates in order to offset the skyrocketing costs. As a result, the dollar has become more appealing to investors. In contrast, the Bank of Japan (BOJ) maintained exceptionally low interest rates.
The dominance of the US dollar on international financial markets is having a ripple effect on the value of other major currencies throughout the globe, such as the British pound and the European euro.