The decline of the Japanese currency is unstoppable. Recently the value of the currency has decreased significantly. On Wednesday (June 26), the currency of the world’s third largest economy saw a major decline.
The yen fell to a 38-year low against the US dollar on the day. That is, the last such situation was created in 1986.
The Japanese currency fell to 160.39 yen against the US dollar. This situation is mainly due to the large difference between the interest rates of the US and Japan.
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In such a situation, traders are keeping an eye on Japan’s finance ministry and central bank. However, the Japanese government has already spent $62 billion between late April and early May to support the currency.
This year, Japan raised interest rates from zero to 0.1 percent. On the other hand, this rate in the United States is 5.25 percent to 5.5 percent.
Earlier, a senior government official of the country said that the Japanese themselves are no longer investing in Japan and the profits earned from abroad are being reinvested abroad instead of being brought back home.
The official said, on condition of anonymity, that structural reforms are needed to solve the problem.
Source: Reuters
MSM
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