The Japanese yen fell to the 157 yen range against the US dollar

On November 19th, in the New York foreign exchange market, the yen fell to the 157 yen to the dollar range. This was the first time in about 10 months that the yen had fallen to this level since mid-January. Against the euro, the yen traded at just over 181 yen to the euro, hitting its weakest level ever. Against the backdrop of the Sanae Takaichi administration’s aggressive fiscal policies, market concerns about deteriorating Japanese finances triggered selling pressure on the yen.

Against the dollar, after touching the 156 yen range in the early hours of November 19th (Eastern Time), the yen fell by 1 yen in about 10 hours. On the evening of November 19th (Japan time), Japanese Finance Minister Satsuki Katayama, Minister of Economy, Trade and Industry Minoru Kōchi, and Bank of Japan Governor Kazuo Ueda held a tripartite meeting, but it was reported that no specific issues regarding the yen’s depreciation and the dollar’s strengthening were discussed, consequently reducing market expectations for government and Bank of Japan intervention in the exchange rate.

The uncertainty surrounding the pace of interest rate cuts by the US Federal Reserve (FRB) also had an impact. The minutes of the October Federal Open Market Committee (FOMC) meeting, released on the 19th, showed that many participants expected the policy rate to remain unchanged until at least the end of the year.

Following the release of the minutes, FedWatch, which predicts policy rates based on the movement of US interest rate futures, showed that the probability of keeping rates unchanged in December exceeded 60%, a significant increase from about 50% the previous day.