Anna 
The US Dollar continued its ascent above 150 yen for the sixth consecutive day on Tuesday, bolstered by growing skepticism that Japan’s era of ultra-low interest rates would conclude soon. The Japanese yen has depreciated by 7% in 2024 alone, surpassing the 150-level against the dollar on February 13. While this level was previously considered a trigger for intervention by the Bank of Japan and the Ministry of Finance, the recent move has been gradual, with limited volatility, indicating minimal immediate concern from Japanese authorities or currency traders.
Japanese Finance Minister Shunichi Suzuki reiterated his close monitoring of FX movements, emphasizing that the yen exchange rate is influenced by multiple factors. Analysts believe that the Bank of Japan (BOJ) faces a delicate situation as it approaches upcoming meetings, with expectations of rate hikes potentially impacting the yen.
XTB Research Director Kathleen Brooks suggested that monetary authorities may be signaling a move toward normalizing interest rates, considering Japan’s economic challenges. The BOJ, which had faced expectations of ending its policy of keeping rates below zero, is now grappling with a recession and declining inflation-adjusted wages, contributing to the yen’s broader depreciation.
The US Dollar’s current resilience above 150 yen is supported by diminishing expectations of an immediate rate cut by the US Federal Reserve, following robust US producer prices and consumer prices data last week. Conversely, Japan’s unexpected economic recession in the final quarter of the previous year has led to a reassessment of the likelihood of a near-term exit from zero rates by the BOJ.
In contrast, China recently reduced its benchmark reference rate for mortgages to stimulate credit demand and revive the property market. However, the yuan faced challenges, hovering near a three-month low, as investors expressed the need for additional policy support to strengthen fragile confidence.
Other major currencies remained relatively stable, with the euro holding steady at $1.0787, and sterling edging up 0.1% to $1.2604. The dollar index, tracking the US currency against six others, eased 0.1% to 104.22. In the cryptocurrency market, bitcoin declined by 0.6% to $51,560 but remained up 22% for February.
