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Japanese Yen Latest: USD/JPY Rallies to a New 24-Year High

September 2, 2022

Via: DailyFX

The Japanese Yen is trading at a fresh 24-year low against the US dollar as the short-term yield spread between the two countries continues to widen. Two-year Japanese bonds are currently trading with an 8bp negative yield, while the US two-year offers a meaty 3.51%, its highest level in 15 years. This gulf in yields, caused by the ever-widening monetary policy stance of the two countries, will eventually force the Bank of Japan into acting to stem the Yen’s weakness otherwise the countries’ trade partners will start questioning whether Japan is actively keeping its currency artificially low. The Japanese central bank has already started to warn the market that they are closely watching the exchange rate, but actions, not words will be needed to stop this move.

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