The Japanese yen has weakened past 150 against the US dollar, a psychologically important level, reaching levels not seen since August 1990.
The Bank of Japan’s two-day meeting is scheduled for next week. Policymakers have ruled raise interest rates to protect against further currency weakness.
On Thursday, Japan 10-year government debt interest rate breached the 0.25% cap the central bank pledged to protect – last standing at 0.252%. Yields on 20-year bonds also rose to their highest levels since September 2015.
Bank of Japan also announced emergency bond purchases Thursday. It has offered to buy 100 billion yen ($666.98 million) of Japanese government bonds with maturities of 10-20 years and another tranche of 100 billion yen with maturities of 5-10 years.
The central bank has repeatedly said it will buy an unlimited number of fixed-rate bonds to cap the yield on 10-year government debt at 0.25% as part of stimulus measures. economic.
On Thursday, Reuters reported that Japanese Finance Minister Shunichi Suzuki said the government would take “appropriate steps against excessive volatility.”
“The recent rapid and one-sided decline in the yen is undesirable,” he said. “We absolutely cannot tolerate the extreme volatility moves caused by speculative trading.”
Shortly after the Bank of Japan’s latest decision to keep interest rates low to support the country’s sluggish economy last month, officials confirmed they had intervened to support the currency. This resists further weakening.
That Involvement briefly pushed the yen to 142 against the dollar. The spread between the intraday high and low is also the widest since 2016.
In April 1990, the yen traded around 159.8 against the dollar and last breached 160 in December 1986.
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