The yen drops to 140, its lowest level in 24 years against the US dollar

The Japanese yen plunged to its lowest level in 24 years in New York on September 1, trading at 140 against the US dollar amid speculation of another interest rate hike by the US Federal Reserve.

The value of the Japanese currency has fallen 25 yen against the greenback over the past six months as the Bank of Japan maintains its monetary easing policy to support the economy, while the Fed raises interest rates interest since March to curb record highs. of inflation.

Many market participants initially expected the Fed to ease interest rate hikes due to fears of an economic slowdown.

But senior Fed officials have indicated since late last week that they would prioritize raising interest rates to counter inflation. Several statistics released on September 1 showed that the US economy remains robust, fueling speculation that the Fed may opt for another interest rate hike.

These factors prompted traders to sell yen and buy US dollars, pushing the value of the Japanese currency to its lowest level since 1998, when Japan was hit by a financial crisis following the collapse a few years earlier. early in the asset-inflated economic bubble.

The yen slid against the greenback after major Japanese financial institutions, Japan Long Term Credit Bank and Nippon Credit Bank, which became Shinsei Bank and Aozora Bank respectively, failed that year.

(This article was written by Yuki Kubota and Kyosuke Yamamoto.)

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