00:00The Japanese yen fell to around 162.4 per US dollar in Asian trading on Tuesday morning,
00:08measuring in at a record low since 1986.
00:12The drop extends a punishing run for the yen,
00:15which has kept spiraling despite the Bank of Japan's efforts to support it.
00:20The new low has fueled speculations of direct government intervention in the markets.
00:25Japan's finance minister Satsuki Katayama said the government is prepared to take
00:30appropriate and decisive action against excessive currency movement.
00:35She added that she has already been in touch with Washington to ensure such an option remains open.
00:41The drop in the yen's value has been exacerbated by the current wide gap between Japanese and American interest rates.
00:49Japanese 10-year bonds have yielded only 2.6% returns compared to US bonds,
00:55which produce around 4.5%, despite Tokyo raising its benchmark interest to 1% in mid-June,
01:02its highest rate since 1995.
01:05Reliance on imported energy, which has been costlier since the US waged its war on Iran,
01:11has also heavily contributed to the currency's downfall.
01:14The Japanese government has already spent a record 63 billion euros intervening in currency markets,
01:21and the newest dip is likely to cause nothing but headache for lawmakers.
Comments