According to reports, the decline of the yen is related to the surge in US and Japanese bond yields. The 40-year Japanese government bond yield rose to 2.535% at one point today, the highest level since 2008. US bond yields have also risen for three consecutive days
On Wednesday, October 23, the Japanese yen continued to fall. As of the time of publication, the US dollar against the Japanese yen rose by 1.38% to 153.12, approaching a three-month low. Analysts say that the yen breaking below the 200-day moving average of 151.38 may trigger more selling, opening the door for further decline.
There are concerns in the market that Japanese officials may take action to support the yen. If the yen continues to depreciate, it may lead to more intervention. Yukio Ishizuki, senior foreign exchange strategist at Tokyo Daiwa Securities, stated:
"Given the current momentum, the yen may further depreciate, and the US dollar may strengthen further. If the yen continues to depreciate, authorities are likely to intervene."
Bloomberg reported that the yen's decline is related to the surge in US and Japanese bond yields. With the Federal Reserve showing caution about rate cuts and market speculation that the next US government may adopt more inflationary policies, Japan's 40-year bond yield rose to 2.535% at one point today, the highest level since 2008, but still well below the yields of 10-year and 30-year bonds. As of the time of publication, Japan's 40-year bond yield stands at 2.38%.
US bond yields are also rising. Marito Ueda, head of market research at SBI Liquidity Market Co., Ltd., stated that the yield on US long-term government bonds remains high, a situation last seen in July when the US dollar against the Japanese yen was around 161. Ueda said:
"US bond yields are unlikely to fall until the impact of the US presidential election fades, and the US dollar is unlikely to be sold off."