Japanese yen nears 33-year low as Powell signals continued interest rate hikes

On Thursday, Powell reiterated his hawkish stance on interest rates, challenging market expectations that had anticipated rate cuts in 2024. Powell's comments underscored doubts about reaching the Fed's 2% inflation target under the current policy framework, causing market forecasts for a potential rate cut in mid-2024 to shift from June to July.

This stance contributed to the yen's worst performance since August, with a monthly depreciation of 1.42%. The currency's decline has been notable over the past month, hitting a one-year low of 151.72 against the dollar on October 31, and it is now approaching a peak not seen since 151.96.

The yen's sharp decline has drawn the attention of Japan's Ministry of Finance (MOF), raising concerns about the need for intervention in foreign exchange markets to stabilize the yen and mitigate potential impacts on the Japanese economy. The Ministry of Finance is closely monitoring these developments as the currency approaches critical levels that previously triggered official intervention.

News Source: 12punto