The Japanese yen has hit yet another all-time low of 109.5 against the Singapore dollar on Sep. 29, 2023.
The yen has been on a weakening trend since it briefly strengthened in July to 104 per Singapore dollar.
Screenshot via Google
Yen continues to weaken as Japan is maintaining negative interest rates
On Sep. 22, the Bank of Japan announced that it would continue to maintain the world's only negative interest rates, the Financial Times reported.
According to the Bank of Japan's governor, Kazuo Ueda, he has "yet to foresee" Japan's inflation coming down to the target level of two per cent.
Japan's core inflation for August 2022 was 3.1 per cent, making it the 17th consecutive month in which inflation has stayed above the Bank of Japan's target, according to Reuters.
The Bank of Japan will only shift its policy once the target inflation rate is seen as achievable, Ueda added.
Will Japan intervene to prop up its currency?
The announcement by the bank caused an immediate sell-off in the yen, which resulted in the currency dropping to 148 yen per U.S. dollar in the span of a few minutes.
On Sep. 29, Japan's Finance Minister, Shunichi Suzuki, was quoted by Kyodo News as saying that the government is closely watching volatility in foreign currency exchange markets and will respond appropriately.
He acknowledged, "Given the current situation, I feel that the yen has been weakening significantly (against the dollar)."
Previously in Oct. 21, 2022, Japan spent US$42.8 billion (S$58.3 billion) to prop up the yen after it reached a 32-year-low of 151.94 per U.S. dollar
At that time, the yen was 104 per Singapore dollar.
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Left screenshot via Google, right image by Jun Rong Loo via Unsplash