The US Treasury Department has warned against excessive yen volatility, calling for further interest rate hikes by the Bank of Japan. The warning came as the yen hit a 40-year low against the dollar.
US Treasury Report
The Treasury Department’s semi-annual currency report, released in Washington, stated that yen weakness has persisted despite a narrowing of US-Japan interest rate differentials. The report noted that excess volatility in the yen is undesirable and that monetary policy normalization would help anchor inflation expectations and reduce excessive exchange rate volatility.
The Bank of Japan has raised interest rates several times, including in June, when it took its policy rate to a 31-year high of 1%. However, investors have pushed down the yen partly due to concerns that the administration of dovish premier Sanae Takaichi may push back against further rate hikes.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
