The price of the yen against the dollar fell this Wednesday to its lowest level since the end of 1986, even surpassing the records that last April pushed the Government of Japan to intervene in the market after setting 34-year lows with respect to the ‘green ticket’. This Wednesday, the dollar exchange rate reached 160.40 yen for each ‘green bill’, the worst crossing since December 1986, according to data from ‘Nikkei’, exceeding the 160.24 yen on April 29 , when it registered its worst crossing against the dollar since April 1990. Japan’s Ministry of Finance confirmed in May that it had allocated a record amount of 9,788 trillion yen (57.22 billion euros) to operations in the foreign exchange market to defend the price of the Japanese currency between April 26 and May 29. This was the first intervention by the Japanese Ministry of Finance in the currency market since it came out in defense of the yen in October 2022, when it allocated 6.349 trillion yen (37.11 billion euros). In fact, last week the United States Treasury Department decided to add Japan to its ‘watch list’ of those trading partners that deserve close attention for their monetary practices and macroeconomic policies, thus joining China, Malaysia, Singapore, Taiwan , Vietnam and Germany. On the other hand, at its last meeting, held in mid-June, the Bank of Japan’s Policy Council unanimously decided to maintain short-term interest rates in a range of 0% to 0.1%, unchanged from its previous meeting, thus delaying the expected tightening of the Japanese country’s monetary policy, although the entity did announce that it is preparing to reduce the amount of its bond purchase program, something that could be detailed at its next meeting at the end of July. Likewise, the markets are waiting to know this Friday the May data on the personal consumption expenditure index, the favorite inflation indicator of the United States Federal Reserve, whose evolution may give new clues about the US central bank’s willingness to lower guys this year.
