Scan to Download ios&Android APP

Yen dives to new 24-year low vs dollar


Share this article

Have a confidential tip for our reporters?

A file photo of Japan's Finance Minister Shunichi Suzuki in Tokyo, Japan, January 4, 2022.
A file photo of Japan's Finance Minister Shunichi Suzuki in Tokyo, Japan, January 4, 2022.

By Samuel Indyk

- The Japanese yen plunged on Tuesday to the lowest levels versus the U.S. dollar since October 1998, as the Bank of Japan's ultra-loose monetary policy stance continued to weigh.

The yen dropped 0.9% to a new 24-year low of 136.330 per dollar , extending losses which have already seen it shed more than 18% of its value versus the greenback this year.

"The trend is your friend after the Bank of Japan last Friday stuck to its ultra-dovish policy mantra," said Kenneth Broux, an FX strategist at Societe Generale.

The currency lost more ground after the Bank of Japan on Friday dashed any expectations of a change in policy and continued to stand alone in its commitment to ultra-easy monetary settings.

Instead it has been ramping up bond-buying to hold 10-year yields in a targeted 0%-0.25% range. But despite its efforts, the yield remains at the upper end of that target

Earlier in the day Japanese Prime Minister Fumio Kishida effectively gave the green light to sell yen when he said the BoJ should maintain its ultra-loose monetary policy.

He brushed aside calls for the policy to be tweaked to target rising living costs.

The yen's decline was also accelerated by some stop losses broken around the 135.60 levels, according to analysts, who noted New York traders had been absent on Monday, a U.S. public holiday.

By 1230 GMT, the Japanese currency was at 136.19 yen, just off the earlier 24-year low. The yen was also down 1.2% to 143.655 per euro, its lowest level since June 9

The yen has lost more than any other major currency against the greenback, as the BOJ's dovish policy stance stands in stark contrast to the general hawkishness among global policymakers.

Reporting by Samuel Indyk; Writing by Saikat Chatterjee; Editing by Sujata Rao

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 400.000+ traders worldwide that chose to trade with

1. Create & verify your account

2. Make your first deposit

3. You’re all set. Start trading