Yen Drops to 23-yr Low Against USD

The yen fell to its lowest level versus the dollar in over 23 years on Monday.

In Tokyo trading, a report from Kyodo News indicated that the Japanese yen plummeted to approximately 135.22, its lowest level since October 1998, on speculation the US would raise interest rates. 

Following the announcement of higher-than-expected inflation figures for May, the Federal Reserve was expected to maintain its rapid monetary tightening.

The dollar was trading at 134.91-92 yen at 1 p.m., compared to 134.35-45 yen in New York and 133.59-62 yen in Tokyo at 5 p.m. Friday.

On Monday, the shockwaves caused by the Yen drop were felt most strongly in Asia. 

The Nikkei in Japan fell 3%, while the yen fell to its lowest level in more than 20 years. 

Because of a strong dollar and Japan’s ultra-loose monetary policy, the Japanese currency has fallen sharply in recent months.

The yen was not the only Asian currency to plummet. 

In early trade, the Indian rupee hit an all-time low of 78.2 against the US dollar.

The Japanese central bank and government expressed alarm about the significant drops in a rare joint statement on Friday, implying that Tokyo may intervene to stop the slide.

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