Yen reaches lowest level since April 1990, surpassing 160-per-dollar | Business News

The Japanese yen plummeted to its lowest levels since April 1990 on Monday, sparking concerns and speculation in the trading world. In a sudden move, the dollar surged to 160.245 yen, breaking through key levels and triggering stop-loss orders. This unexpected shift in the market left traders scrambling to adjust their positions, exacerbating the yen’s decline.

While the yen’s sharp drop had minimal impact on the euro and sterling, market participants remained wary of potential intervention by Japanese authorities to stabilize the currency. The yen’s nearly 11% decline this year has raised alarms and prompted speculation about government intervention.

Despite the yen’s volatility, the focus now shifts to the upcoming Federal Reserve policy review on May 1. Investors are anticipating a delay in rate cuts following recent U.S. inflation data and statements from Fed officials. The uncertainty surrounding the Fed’s decision has led to a more cautious approach in the market, with expectations for a sustained hawkish surprise remaining high.

Vishnu Varathan, head of Asia economics and strategy at Mizuho Bank in Singapore, predicts more two-way action in the dollar-yen pair leading up to the Fed meeting. The outcome of the meeting and any hints of future rate cuts will likely dictate the direction of the yen in the coming weeks.

Overall, the market remains on edge as traders navigate through the uncertainty surrounding central bank policies and global economic conditions. The yen’s recent plunge serves as a stark reminder of the volatility and unpredictability that characterizes the foreign exchange market.