INSUBCONTINENT EXCLUSIVE:
currency briefly dipped below 147 yen to the dollar, a level not seen since September 3
combination of factors created a perfect storm for yen depreciation
Historically, the yen has been weakening since 2022, reaching multi-decade lows against the dollar.In July 2024, it hit 161 yen per dollar,
raising concerns among economists and policymakers
The Bank of Japan had previously taken steps to address this trend.In late July 2024, it implemented an interest rate hike
internationally, potentially boosting export-driven sectors
depreciation may complicate these efforts by potentially increasing imported goods costs.Analysts now predict the Bank of Japan is unlikely
to raise interest rates again this year, potentially leading to continued yen depreciation through 2024.Some forecasts suggest the
dollar-yen exchange rate could reach 143 yen per dollar by year-end and 136 yen per dollar by the close of 2025.Global economic conditions
A significant US economic downturn might prompt Federal Reserve rate cuts, potentially leading to yen appreciation.In an extreme scenario
where the Fed returns to zero interest rates, the yen might strengthen beyond 120 per dollar.As the situation remains fluid, market
participants will closely monitor further comments from Japanese officials and global economic indicators.The coming months will likely see
continued currency market volatility as investors navigate this shifting landscape.
