Largest policy rate gap in 22 years pins yen near last year's low

Japan's currency ambassador steps up verbal fusillade, fueling war of nerves

The yen finds itself at the mercy of Bank of Japan policy and overseas investors eager to borrow currency at ultra-low interest rates while their home currencies are subject to rates almost 5 percentage points higher. © Reuters

RYO SAEKI, YASUHA MINAMI and MASAYA KATO, Nikkei staff writers

September 7, 2023 19:37 JST

TOKYO -- The long-suffering Japanese yen now sits at a year-to-date low and is threatening to tumble below last year's nadir of 151.94 to the dollar.

The government has begun stepping up its verbal interventions, but experts say the yen's current weakness reflects interest rate gaps between Japan and other markets. As such, the depreciation will be difficult to arrest, the experts say.