USD/JPY Exchange Rate Surpasses 150 Yen... "Shock from US CPI Exceeding Expectations"

Three Months Since Last November
Yen Falls 23% Over Past Two Years
Weakest Among Major Currency Nations

The yen-dollar exchange rate surpassed 150 yen per dollar. It is the first time in about three months since it recorded 151.89 yen last November.

[Photo by Yonhap News]

Bloomberg reported on the 13th (local time) that the yen-dollar exchange rate surged 1% and exceeded 150 yen, a psychological resistance level considered by Japanese monetary authorities, after the U.S. January Consumer Price Index (CPI) exceeded market expectations. At the time the U.S. January CPI was announced to have risen 3.1% year-on-year, the yen-dollar exchange rate rose by about 1 yen.

The report explained that the yen has depreciated more than 23% over the past two years, marking the largest decline among all major currencies tracked by Bloomberg. Since the beginning of this year, the yen has fallen more than 6% against the dollar, suffering the largest loss among the Group of Ten (G10) currencies. It also depreciated more than 3% against the euro, the worst performance among developed country currencies. The yen’s decline is attributed to the outlook for the U.S. to maintain a high interest rate policy, which has driven demand for the dollar.

Comments from key officials of the Bank of Japan (BOJ) that tempered market expectations for aggressive hikes in Japan’s benchmark interest rate are also cited as a cause of the yen’s weakness. Previously, BOJ Governor Kazuo Ueda stated, "Even after the end of negative interest rates, Japan’s monetary policy will maintain an accommodative stance for a considerable period." Following this, BOJ Deputy Governor Shinichi Uchida reaffirmed Governor Ueda’s policy last week, saying, "It is unlikely that the BOJ will continuously and rapidly raise policy rates."

Tom Nakamura, a portfolio manager at AGF Investment Inc., warned against excessive market optimism, saying, "The market is already preparing for yen strength on expectations that Japan will exit its negative interest rate policy, but the benchmark rate hike will be later and slower than the market anticipates."

Meanwhile, immediately after the CPI announcement, the Australian dollar, Norwegian krone, Swiss franc, New Zealand dollar, and Swedish krona also fell more than 1% against the dollar.

This content was produced with the assistance of AI translation services.