JPY has reached new lows. Overview for 26.04.2024

The Japanese yen against the US dollar appears even weaker than before. The current exchange rate for USDJPY stands at 156.19.

Pressure on the yen is becoming increasingly widespread, but the Japanese authorities are not rushing to defend their currency. There is undoubtedly a secondary benefit here: exporting companies earn more and increase financial inflows into the treasury.

At the April meeting, the Bank of Japan left the interest rate unchanged from 0-0.1% annually. It only made minor adjustments to its inflation forecast, which did not surprise the market.

Investors have interpreted the Bank of Japan's position as conservative. This stance, which does not allow for policy normalisation, has dissatisfied market participants.

The primary driver of the JPY's weakness is the colossal difference in interest rates between the Bank of Japan and the US Federal Reserve. As long as this disparity persists, it will continue to fuel attacks on the yen. Currency interventions will only provide temporary support in this scenario.