Japanese yen falls to its lowest since 1998

Bloomberg

The yen declined to its lowest since 1998, prompting warnings from Japanese government officials, as the yield gap between the US and Japan widened to heap more pressure on the currency.
It falls as much as 0.5% to 139.68 per dollar in Thursday trading — a hair’s breadth from the key psychological level of 140, before paring the loss. Some analysts have said a move past that level may trigger government intervention, though economists have repeatedly pointed out the high risk for Japan of any failed
attempt to prop up the yen.
“We’re watching fluctuations in foreign exchange rates with a high sense of urgency,” Chief Cabinet Secretary Hirokazu Matsuno said to reporters in Tokyo. “Rapid moves in the foreign exchange markets aren’t desirable.”
The comments suggested the government remains some distance from taking more concrete action to help the yen, while the Bank of Japan’s dogged insistence on sticking with rock-bottom rates will likely keep the door open to further falls.
The last time Japan propped up the currency was during the Asian financial crisis of 1998 when it reached around 146 to the dollar. It had previously intervened at levels around 130.
Abrupt moves in exchange rates are not desirable, a finance ministry official had said earlier in the day.
The yen’s latest slide shows continued impact on markets of the hawkish Federal Reserve Jackson Hole symposium, with benchmark Treasury yields pushing up through 3.2%. Data showing that euro-zone inflation jumped to a record in August, above expectations, also weighed on global bonds.
“European CPI for August confirmed that global inflation is far from being contained and renewed upward pressure on US yields to give tailwinds to the dollar-yen,” said Takuya Kanda, general manager at Gaitame.com Research Institute in Tokyo.