Amid all the hand-wringing about the yen tumbling to a 24-year low, it may seem churlish to point out that it’s actually the best performing Group-of-10 currency over the last four days.
The traditional haven is little changed against the dollar since June 8th, when global stocks began their latest selloff — one that has pushed them into a bear market. Peers from fellow haven the Swiss franc to the commodity-sensitive Norwegian krone have slumped about 2% and 5% over that timeframe.
The yen’s reprieve may be short-lived. The currency still fell to the lowest since 1998 against the dollar Monday, as the Bank of Japan’s easy monetary policy increasingly feels the strain of rising interest rates globally.
Down about 14% this year — the yen is the worst-performing major currency — as the BOJ keeps rates low to boost a sluggish economy while US yields surge on bets for continued Federal Reserve hikes.
Comments from Japan’s top government spokesperson echoes the message issued in Friday’s joint Bank of Japan (BoJ), government statement – concerns over the yen’s sharp decline results in it being ready to respond appropriately.
In addition, BoJ chief Haruhiko Kuroda has made a significant U-turn regarding the yen’s decline. Previously, the Bank head alluded to the positives and negatives of yen weakness, while still favoring a gradual decline.
In his latest address to parliament, Kuroda stated, “The yen’s recent sharp declines are negative for Japan’s economy and therefore undesirable, as they make it hard for companies to set business plans”.