The yen weakened to its lowest since November as traders shifted their focus from a hawkish Federal Reserve to Friday’s Bank of Japan policy decision.
The Japanese currency fell as much as 0.7% to 141.08 per dollar, triggering comments from Chief Cabinet Secretary Hirokazu Matsuno that excessive movements weren’t desirable. Last month when the yen weakened to similar levels, top currency official Masato Kanda said that the government would take action if needed, after an unscheduled meeting between the BOJ, Ministry of Finance and Financial Services Agency.
A hawkish stance from Fed officials on Wednesday stands in sharp contrast to BOJ policymakers who have stuck with monetary easing, a disparity that favors the dollar over the yen. The Fed projected borrowing costs will go higher than previously seen, while almost all of the economists surveyed by Bloomberg see the BOJ leaving its ultra loose policy unchanged Friday.
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