Yen Slips to Multi-Month Lows Against Major Currencies

The yen dipped close to a four-month low against the US dollar and a 16-year low against the euro on Wednesday, driven by expectations of sustained accommodative monetary policy in Japan despite the Bank of Japan’s recent policy shift.

On Wednesday, the yen touched its lowest level in four months at 151.58 against the dollar, before settling at 151.56 in its latest trading, edging closer to its multi-decade low at 151.94. Concerns about potential intervention by Japanese authorities resurfaced amidst the currency’s downward trend.

The yen’s decline extended broadly, with the currency sliding to 164.66 against the euro, marking its lowest level since 2008. Similarly, against the British pound, it dropped to 192.75, reaching its lowest point since 2015. Japan’s markets remained closed on Wednesday due to a holiday.

In a historic departure from decades of extensive monetary stimulus, the Bank of Japan terminated eight years of negative interest rates and other unconventional economic policies on Tuesday.

Despite this significant policy shift, market focus on Wednesday remains on the Federal Reserve. While no immediate action is expected, attention is directed towards the central bank’s economic forecasts and remarks by Chairman Jerome Powell, garnering widespread interest and scrutiny.

According to data from the CME Fed Watch tool, 59 percent of traders anticipate the commencement of a monetary policy easing cycle by the US Central Bank in June, significantly lower than previous expectations.

The dollar index, measuring the US currency against a basket of six currencies, recorded a modest uptick of 0.039 percent to 103.90. Meanwhile, the euro was last traded at $1.0866.

In the realm of cryptocurrencies, Bitcoin experienced a 3.4 percent decline to $61,569, touching its lowest levels in two weeks at $60,780 earlier in the session.