The yen fell to its lowest level against the U.S. dollar in nearly 38 years on Wednesday, with the dollar reaching 160.82 yen, its highest since December 1986. The greenback’s strength, up 14% against the yen this year, is driven by significant interest rate differences, with U.S. rates at 5.25%-5.5% compared to Japan’s 0%-0.1%.
The euro also surged to 171.79 yen, the highest since 1992. Japan’s Ministry of Finance, which previously intervened with $62 billion to support the yen, remains on high alert but has not yet acted.
U.S. economic data showing a slowdown and the upcoming PCE inflation index are in focus, with potential implications for future Fed rate moves. Other currencies, including the Australian dollar and Chinese yuan, also saw notable movements against the U.S. dollar.
