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Yen drops to 20-year low against dollar

TOKYO (AFP) – The yen hit its lowest level against the dollar in two decades yesterday, extending recent falls as the gap widens between Japan’s ultra-loose monetary policy and United States (US) tightening.

Despite being traditionally considered a safe-haven currency, uncertainty fuelled by the war in Ukraine has not caused the yen to strengthen.

Instead, moves by the US Federal Reserve towards a more aggressive policy and the shock of rising oil prices in Japan pushed the currency lower, analysts said.

One dollar bought 126 yen yesterday afternoon, the lowest rate since 2002. Government spokesman Hirokazu Matsuno said “the stability of exchange rates is important and we see rapid currency moves as undesirable”.

“We will monitor trends in the foreign currency market and the impact on the Japanese economy with a sense of urgency,” he added.