Yen Weakens Amid War Effects, Dollar Seizes Safe Haven
The US dollar strengthened against the yen on Friday (March 27th), breaking through 160 yen for the first time since July 2024, a level that has rekindled speculation of Japanese intervention. USD/JPY was last up 0.22% at 160.15, near an area that market participants believe could trigger stabilization measures if the yen's weakening is deemed excessive.
The dollar index (DXY) also strengthened 0.17% to 99.85 and is on track for its strongest monthly gain in nearly a year. Demand for the dollar has been driven by safe-haven flows related to the war in the Middle East, with investors choosing the greenback over traditional safe havens like gold or government bonds.
Pressure on the yen and Japanese government bonds has persisted for months, as a more expansionary fiscal policy push to support the economy is seen as complicating the Bank of Japan's efforts to gradually raise interest rates. Since the war began, the yen has weakened more than 2% against the dollar, weighed down by Japan's fragile fiscal condition and heavy dependence on energy imports. Tokyo authorities have repeatedly stated their readiness to act; The last intervention occurred in July 2024 when the yen approached 161 per dollar, its weakest level since the 1980s.
Source: Newsmaker.id
