The Japanese yen fell to a 32-year low of over 150 yen per dollar on Tuesday, October 3, 2023, sparking concerns that the Japanese government may intervene in the currency market to prop up the yen.
The yen’s weakness is due to a number of factors, including the widening interest rate differential between Japan and the US, the global economic slowdown, and the Japanese government’s reluctance to intervene in the currency market.
The Bank of Japan has maintained ultra-loose monetary policy to support the economy, while the US Federal Reserve has been raising interest rates aggressively to combat inflation. This has made Japanese assets less attractive to investors, and has led to a sell-off of the yen.
The global economy is also facing a number of challenges, including rising inflation, supply chain disruptions, and the war in Ukraine. This is weighing on the yen, which is seen as a safe-haven currency.
The Japanese government has intervened in the currency market in the past to support the yen, but it has been reluctant to do so recently. This is because the government is concerned about the negative impact of intervention on the economy.
A weaker yen makes imports more expensive, which could further fuel inflation in Japan. The government is also concerned about the impact of a weaker yen on Japanese businesses and consumers.
The Japanese government is likely to continue to monitor the yen’s movements closely, and may intervene in the currency market if it falls too sharply.
Aries Yuangga 
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