solcryptogame| The yen fell to a 34-year low, raising the risk of intervention by Japanese authorities

The yen fell to a 34-year low against the dollar after Bank of Japan governor Kazuo Ueda hinted that monetary policy would remain loose, fuelling speculation that Japanese authorities could intervene in the market as early as Friday to stem the yen's decline.

The Bank of Japan left the benchmark interest rate unchanged. Kazuo Ueda made few remarks in support of the yen at the subsequent press conference, and the yen fell 0% at one point.Solcryptogame.8% to 156.95 yen to the dollar. The yen continued to fall after the release of the US core inflation indicator for March.

The yen has fallen 10% against the dollar so far this year, making it the worst performer among the Gmur10 currencies. The main factor driving its devaluation is the huge spread between the US and Japan, where US interest rates are at multi-year highs after the Fed sharply raised interest rates last year, while Japanese interest rates remain stubbornly near zero.

"this is incredibly weak," said Justin Onuekwusi, chief investment officer of St James Place Management. "this level of weakness is bound to cause concern.SolcryptogameWe think the yen has gone too far. "

Japanese authorities have repeatedly warned that the yen will not be allowed to depreciate too much and too fast. Japanese Finance Minister Suzuki Shunichi reiterated after the central bank meeting that the government will respond appropriately to exchange rate movements.

After the Bank of Japan's decision was announced, the East Stock Exchange Index rose 0.9%, and real estate stocks expanded their gains. The yield on the benchmark 10-year note fell to 0.25% from 0.93% earlier in the day.

"the Bank of Japan has proved once again that its dovish level can dwarf Wall Street's most dovish expectations," said Charu Chanana, a strategist at Saxo Capital Markets. "We are back in a state of waiting for intervention to stop the yen from plummeting. But any intervention without concerted action and hawkish policy messages will be futile. "

From the analysis of the past remarks made by Makoto Kanda, the top foreign exchange official of Japan's Ministry of Finance, 157.60 yen is a key level worthy of attention. The Ministry of Finance will release intervention data for the period from March 28 to April 25 on April 30, while data, including today, will be released on May 31.

Other potential triggers include Japanese public holidays on Monday and Friday, where light trading could lead to the risk of wild swings in the market.

"if the yen falls further, as it did after the Bank of Japan's policy decision in September 2022, the likelihood of intervention will rise," said Hirofumi Suzuki, chief foreign exchange strategist at Sumitomo Mitsui. It is not the level but the speed that triggers the action. "