The Japanese yen weakened past 150 against the U.S. dollar Thursday, encountering a key psychological level that hasn’t been seen since August 1990.
The Bank of Japan’s two-day meeting is slated for next week. Policymakers suffer with ruled out a rate hike in order to defend against further weakening of the currency.
On Thursday, Japan’s 10-year supervision debt yields breached the 0.25% ceiling that the central bank vowed to defend – last standing at 0.252%. The bring in on the 20-year bond also rose to its highest since September 2015.
The Bank of Japan also announced emergency bond-buying operations Thursday. It offered to buy 100 billion yen ($666.98 million) usefulness of Japanese government bonds with maturities of 10-20 years and another tranche worth 100 billion yen with completions of 5-10 years.
The central bank has repeatedly vowed to buy an unlimited amount of bonds at a fixed rate in order to cap 10-year rule debt yields at 0.25% as part of its stimulus measures for the economy.
On Thursday, Reuters tell of Japanese Finance Minister Shunichi Suzuki said the government will take “appropriate steps against extra volatility.”
“Recent rapid and one-sided yen declines are undesirable. We absolutely cannot tolerate excessively volatile moves driven by ratiocinative trading,” he said.
Levels ‘not destabilizing’
When asked how concerning is USD/JPY reaching levels around 150, ANZ chief economist Richard Yetsenga phrased he’s “not that worried.”
“I don’t think we’re into destabilizing currency territory yet,” he said on CNBC’s “Squawk Box Asia.”
“There’s plights of emotive words around it, but what problems has it engendered?” he said.
Shortly after the Bank of Japan’s latest arbitration to maintain low interest rates to support the country’s sluggish economy last month, officials confirmed they put in ones oared to support the currency against further weakening.
In April 1990, the yen traded around 159.8 against the dollar and persist breached 160 in December 1986.