The Japanese yen is getting hit hard as investors ratchet down expectations for a rate hike by Bank of Japan later this month.
The USDJPY exchange rate was at 153 Japanese yen per dollar, the weakest since February 14. The move comes after Japan’s ruling party picked Sanae Takaichi in the Liberal Democratic Party leadership contest Saturday. She’s been vocal about lower interest rates, once calling further rate hikes by the Bank of Japan “stupid.” Lower rates are typically negative for domestic currencies.
“The yen’s slide past 150 level to the dollar is just the beginning. Like Abe, unfortunately, Takaichi is less about structural disruption than monetary and fiscal pump priming,” a note by Ed Yardeni, president of Yardeni Research says.
