JPY: devaluation reaches new heights. Overview for 01.11.2023

The Japanese yen, paired with the US dollar, is undergoing rapid depreciation. The current USDJPY exchange rate stands at 151.24.

While our discussions about the yen have become more frequent than ever before, it is impossible to overlook the growing attention it is receiving.

The JPY exchange rate devaluation has now reached a new level. The US dollar has surged past the 151.20 threshold, marking the highest annual value and potentially revisiting levels last witnessed in 1990. The market views the Bank of Japan's decision to ease control over long-term interest rates as an insufficient response to the challenges faced by the yen.

However, this is just the tip of the iceberg. In reality, the substantial interest rate differential between the Bank of Japan and the US Federal Reserve continues to exert pressure on the yen. This pressure will persist until there is a fundamental shift in the economic landscape.

In its meeting yesterday, the BoJ maintained the annual interest rate at -0.10%.