The Japanese Yen plunged to its lowest level since October 1998 today against the US dollar following a still unclear stance on very loose monetary policy from the Bank of Japan (BoJ).
The Yen slipped 0.9% to a 24 -year low of 136.330 per dollar, extending losses where it has depreciated more than 18% against the US dollar this year.
According to Kenneth Broux, FX strategist at Societe Generale, "This trend is expected to continue as the Bank of Japan (BoJ) remains adhering to its ultra-dovish policy principles".
The currency lost more positions after the Bank of Japan on Friday silenced any expectations of a change in policy and gave an indication of the BoJ’s commitment to stay with very simple monetary policy.
Instead the BoJ has increased bond purchases to hold 10-year yields in the 0%-0.25%range. Even with the move, bond yields remain at that target. Earlier in the day Japanese Prime Minister Fumio Kishida had given the green light to sell the yen when he said the BoJ should maintain its very loose monetary policy. He dismissed calls for the policy to be modified to target the rising cost of living.
The yen has lost more than any other major currency against the US dollar because the BOJ’s dovish policy stance is very different from the hawkish stance taken among global policymakers.
The US dollar index, which measures the US dollar against six major currencies, traded 0.16% lower at 104.095.
U.S. Secretary of the Treasury Janet Yellen on Tuesday is expected to announce the appointment of Marilynn Malerba as U.S. Treasurer.
