The yen reaches a new 15-month high against the dollar on Thursday, breaking through a closely watched technical and psychological level at ¥107 for the first time since November of 2016 as the dollar continues to weaken.
The yen was at 106.63 against the dollar, extending gains from its previous close when it jumped to the highest level in more than a year. A higher yen adds to the challenge Japanese policy makers face in trying to revive growth and inflation, because it weighs on the earnings of exporters and import prices.
The rise of the yen came after the dollar declined 0.7 percent overnight during a rough session that saw the release of consumer price inflation and retail sales data.
Currency strategists have interpreted the yen’s moves as a signal that volatility from the previous stock-market revolution is spilling over in the currency market. Japan’s is considered as a haven during uncertain times and risk aversion, making it attractive to investors who are still determining whether the recovery in equities is here to stay.
According to Japanese Finance Minister, Taro Aso, the yen’s recent movement isn’t abrupt enough to warrant intervention.
“From our perspective, the current situation doesn’t warrant special intervention. The yen isn’t rising or falling abruptly,” also said, answering questions from a lawmaker in parliament on Thursday. He didn’t elaborate about what kind of intervention he was talking about, but the remark sent the yen higher.