On Friday (November 8), the Japanese yen continued to decline against the US dollar, reaching a peak of 154.7. The yen has depreciated nearly 10% since mid-September, drawing widespread market attention. According to the latest data, the Japanese government intervened in the foreign exchange market twice in July this year, using 3.17 trillion yen and 2.37 trillion yen respectively to address the yen's persistent weakness. Prior to government intervention, the yen fell below 160 against the dollar, marking a new low in 38 years. This currency depreciation mainly stems from speculation on the widening interest rate differential between Japan and the US.
With the yen's continued weakness, Japan may intervene in the currency market again. Japanese Finance Minister Shunichi Kishiida noted that the foreign exchange market is experiencing unilateral and severe fluctuations. The Japanese government will monitor exchange rate developments with a high sense of urgency and is prepared to take measures against speculative volatility at any time. He stated that appropriate actions would be taken to ensure market stability if necessary.
Following the Federal Reserve's announcement to lower the federal funds rate to 4.5%-4.75%, the interest rate differential between Japan and the US has widened further, putting additional pressure on the yen. Japanese Chief Cabinet Secretary Yoshimasa Hayashi stated that they will closely monitor the impact of the Fed's rate cut on the Japanese economy, particularly against the backdrop of yen depreciation driven by the expanded US-Japan interest rate differential. Technical analysis indicates that if the dollar breaks above the 155 mark against the yen, it may further challenge 155.45-155.50.
