The Japanese yen briefly fell to 161.93 against the US currency in overnight New York trading. That’s revisiting a level last seen in 2024, which was the weakest in almost 40 years.
Buying of the dollar against the yen is being driven by speculation the Federal Reserve may raise interest rates this year. This is based on concerns higher oil prices could reignite inflation in the United States.
In later trading, the yen recovered somewhat on reports Japan’s Finance Minister Katayama Satsuki and US Treasury Secretary Scott Bessent held overnight talks. That prompted speculation about possible intervention in the currency market by Japanese authorities.
The yen traded around the mid-161 level against the dollar in Tokyo on Tuesday.
Market watchers say given the broad-based purchases of the US currency, there is skepticism about the effectiveness of any intervention to support the yen. However, traders are on the alert as the Japanese currency approaches levels seen in December 1986.
