Yen hits 34-year low against Dollar

Yen’s decline continues unabated

By Ahmed Azzam | @3zzamous | 15 April 2024

Market close
  • Yen hits 34-year low; no intervention from Japan.

  • US retail sales rise 0.7% in March, exceed 0.3% forecast.

  • ECB’s Kazimir stresses flexibility in monetary policy.

The forex markets this week opened with a sharp focus on the Japanese yen, which plummeted to a 34-year low against the dollar. Despite repeated warnings from Japanese officials about their readiness to intervene against speculative trading, no concrete actions have been taken. Finance Minister Shunhi Suzuki reiterated the government's vigilant stance, stating, "We are closely monitoring developments and are prepared to take all necessary steps." However, the lack of intervention has left traders surprised, exacerbating the yen's decline.

Dollar resurgence linked to retail sales spike

In the United States, retail sales for March 2024 unexpectedly rose by 0.7% month-over-month, following a revised increase of 0.9% in February. This growth, significantly above the anticipated 0.3%, signals robust consumer spending strength. With gains in eight out of thirteen categories, the data spurred a brief rally for the dollar.

ECB's Kazimir cautions on future monetary policies

Peter Kazimir, a member of the ECB Governing Council, emphasized the necessity of maintaining a flexible monetary policy stance after the expected rate cut in June 2024. He stated, "June is an opportunity to recalibrate our approach in light of improving economic conditions. We are not pre-committing to a definite path post-June." Kazimir clarified that the initial rate reduction would not signify a shift to an easing cycle, as monetary policy needs to remain restrictive to manage inflation effectively.