Yen exchange rate today
According to Lao Dong, on October 13, the Japanese Yen (JPY) continued to plummet and hit its lowest level since February, in the context of domestic political instability, global risk-off sentiment and the increasingly obvious monetary policy gap with the US.
In the first trading session of the week, the USD/JPY exchange rate surpassed 152, marking a record deep decrease of the Yen against the US dollar. Despite a slight recovery in the Asian session, the JPY is still considered the weakest among major currencies.
Yen recovers but not long-term
According to FXStreet, analysts believe the main cause comes from the chaotic political situation in Japan after the Komeito Party suddenly ended its 26-year alliance with the ruling Liberal Democratic Party (LDP). The event hasased Ms. Sanae Takaichi's prospects of becoming the first female prime minister, raising concerns about the political stability of the Tokyo government.
Internationally, trade tensions between the US and China have also contributed to the shaking of the currency market. US President Donald Trump threatened to impose an additional 100% tax on Chinese goods from November 1, in response to Beijing's plan to limit exports of rare earth minerals. China's Ministry of Commerce immediately declared that it would "protect national interests by all necessary means".
Escalating tensions have caused investors to seek safe-haven assets such as gold, but the Yen - which is also considered a safe haven - has not benefited in the long term. The reason is that Mr. Trump later signaled a "low temperature" when he affirmed that the US did not want to harm China and wanted to cooperate, helping the global risk sentiment increase sharply, causing the Yen to continue to be sold off.
Meanwhile, the Bank of Japan (BoJ) remains loose, despite speculation that the agency could raise interest rates by the end of the year. In contrast, the US Federal Reserve (Fed) is expected to cut interest rates twice more before the end of 2025. This policy gap continues to put the Yen under pressure.
