Money
Dollar tops 150 yen for first time in a year
The dollar rose above 150 yen today for the first time in a year. — Reuters file pic

LONDON, Oct 3 — The dollar rose above 150 yen today for the first time in a year, as the Japanese currency weakened further on a mix of ultra-loose monetary policy in Japan coupled with rising US interest rates that are attracting investors to the greenback.

In mid-afternoon trading, the dollar/yen rate hit 150.16, a level not seen since October 2022, before falling back.

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Analysts say the yen's decline could prompt the Bank of Japan to intervene in foreign exchange markets to support its currency, since the weakness increases the cost of imports such as food and energy for families and businesses.

By selling some of its dollar reserves, the central bank could lift the yen's value — as it did in October 2022, when the yen also tumbled to 150 against the dollar, a level that had not been seen since the 1990s.

At the time the Bank of Japan spent US$43 billion to support its currency, the financial ministry said.

Unlike in many major economies around the world, where officials have been raising interest rates to fight inflation spurred in large part by Russia's invasion of Ukraine, Tokyo has kept rates at zero or below in a bid to spur economic growth and inflation.

Its current short-term benchmark rate is -0.1 per cent, meaning that banks and financial firms have to pay the Bank of Japan to store their funds — a move aimed at encouraging them to lend or invest the money instead.

In the United States meanwhile, a closely watched labour report showed a surprise increase in the number of vacant job postings, to 9.6 million openings, a sign of continued tightness in the jobs market.

The data could give Federal Reserve officials room to increase interest rates further in their fight against inflation, spurring further gains in US bond yields. — AFP

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