Yen Dips to 32-Year Low Against Dollar Ahead of Bank of Japan Policy Decision
USD/JPY Tumbles to Lowest Level Since 1990 as Market Expects Hawkish Shift
The yen has fallen to its lowest level against the dollar in over 30 years, with investors betting on a hawkish shift in the Bank of Japan's ultra-loose monetary policy path.
The Japanese currency has been under pressure all year as the Federal Reserve has aggressively raised interest rates to combat inflation. This has led to a widening yield differential between the U.S. and Japan, making the dollar more attractive to investors seeking higher returns.
The Bank of Japan is expected to keep its ultra-low interest rates unchanged at its policy meeting later this week. However, economists are beginning to speculate that the central bank may signal a shift in its stance as inflation in Japan continues to rise.
If the Bank of Japan does take a more hawkish tone, it would likely lead to a further sell-off in the yen. This would be a significant change from the past few years, when the yen has been a safe haven for investors during periods of market turmoil.
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