Japanese Yen Hits Lowest Value in 20 Years... Exchange Rate Rises to 126 Yen per Dollar

On the 26th, amid trade tensions between the United States and China, the Japanese yen's value rose intraday to 104 yen, its highest level since 2016. At the KEB Hana Bank Counterfeit Response Center in Euljiro, Seoul, an employee is organizing yen currency. Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Bo-kyung] The value of the Japanese yen fell to its lowest level in 20 years on the 13th. The Bank of Japan is maintaining a weak yen stance through large-scale monetary easing policies.

On that day, in the Tokyo foreign exchange market, the yen-dollar exchange rate rose to the 126 yen range per dollar, marking the highest level in about 20 years since May 2002. This represents an increase of about 10% from the 114-115 yen level in late February.

The Nihon Keizai Shimbun analyzed that the widening interest rate gap between the United States and Japan has strengthened investors' moves to sell yen and buy dollars.

While the U.S. central bank, the Federal Reserve (Fed), has started raising benchmark interest rates, the Bank of Japan continues large-scale monetary easing, widening the interest rate gap between the U.S. and Japan. This effectively means the Bank of Japan is tolerating a weaker yen.

Bank of Japan Governor Haruhiko Kuroda said on the 18th of last month, "The basic structure, where a weaker yen overall pushes up both the economy and prices, and acts as a plus for the Japanese economy, remains unchanged." Governor Kuroda also recently told banking officials that "we will persistently continue the current strong monetary easing."

After last month's Monetary Policy Meeting, the Bank of Japan announced it would keep the short-term interest rate at -0.1%, and continue large-scale monetary easing by purchasing long-term government bonds without limit as needed to guide the 10-year government bond yield, a long-term interest rate indicator, to around 0%.

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