According to the "Nihon Keizai Shimbun" reported on April 29, in the international foreign exchange market on the same day, the yen fell rapidly against the US dollar, once falling below 160 yen to 1 US dollar, once again refreshing a new low in about 34 years.
The yen also fell rapidly against other major currencies, with the exchange rate against the euro falling below 171 yen to 1 euro, refreshing the lowest value in history.
Analysts believe that the depreciation of the yen has a serious negative impact on the Japanese economy. However, under the premise that the dollar continues to strengthen, even if the Japanese government intervenes, the effect remains to be seen.
Since the beginning of this year, the yen has fallen by about 9% against the dollar, the largest decline among the currencies of the "Group of Ten" (the Paris Club, which originally consisted of the United States, Japan, and other ten countries).
The Fed's previous interest rate hike policy led to an increase in the interest rate differential between the yen and the dollar, which is considered to be the main reason for the depreciation of the yen.
Some experts pointed out that in addition to the disturbance of the Federal Reserve's monetary policy, the depreciation of the yen is also related to the long-standing structural problems of the Japanese economy.
Japan's long-term economic downturn, especially in the new round of scientific and technological revolution represented by artificial intelligence, has led to the country's economy being unable to effectively support the stability of the yen.
Hideo Kumano, chief economic analyst at Japan's Dai-ichi Life Economic Research Institute, pointed out that the continued depreciation of the yen has slowed down the investment and production of Japanese enterprises and reduced the purchasing power of consumers, which has had a serious negative impact on the Japanese economy.
A source said that the Japanese government and the Bank of Japan may have intervened in the market, and the financial officer of the Japanese Ministry of Finance, Mato Kanda, met with reporters after the yen rebounded against the dollar on the afternoon of the 29th.
Regarding the situation of selling dollars and buying yen in the foreign exchange market on that day, which had an impact on the yen exchange rate, Kanda said that he "has no comment" at present.
Since March, the main reason for the decline of the yen against the dollar has been the "appreciation of the dollar" caused by the weakening of the Fed's interest rate cut expectations. The continued strong rise in U.S. prices and the expectation that the Fed's high policy rate will persist for an extended period of time have accelerated the dollar's appreciation against many currencies.
As Japan is about to enter the Golden Week holiday, exporters and others will stop buying yen, and fears that the yen may depreciate further are spreading in the market. Japanese Finance Minister Shunichi Suzuki said on the 26th in response to the depreciation of the yen that he will continue to "pay close attention to the dynamics of the foreign exchange market and take all possible countermeasures".