Tokyo: The Japanese yen has plunged to its lowest level in 40 years, reaching depths not seen since 1986 during Asian trading on Wednesday. The exchange rate dropped to 162.84 yen per US dollar, primarily due to the sustained strengthening of the US dollar.
According to Thai News Agency, the surge in the US dollar was driven by a sharp rise in US government bond yields. This increase comes amid investor expectations that the Federal Reserve may soon raise interest rates, alongside anticipation for a significant US nonfarm payroll report. The yen's sharp decline has sparked speculation among investors regarding potential direct intervention by Japanese authorities in the currency market.
Currency traders are speculating that the upcoming US government holiday this Friday could serve as a strategic time for Tokyo to intervene by purchasing yen to bolster its value. The reduced market liquidity during the holiday could potentially amplify the effect and effectiveness of any currency intervention.
In the broader currency market, the US dollar continues to maintain its advantage over major global currencies. The euro weakened by 0.11 percent to 1.1408 USD, while the British pound edged lower by 0.2 percent to 1.32369 USD. The US dollar index against a basket of major currencies remained steady at 101.34.