TOKYO (AFP) – The yen slid to its weakest value against the dollar since 1986 on Friday, putting investors on alert for a possible fresh forex intervention by the Japanese government.
One dollar bought JPY161.12 at around 0100 GMT, compared with JPY160.70 in early Tokyo trade.
It came as Japanese shares opened higher, taking cues from Wall Street rallies as traders awaited key US inflation data.
The benchmark Nikkei 225 index was up 0.90 per cent, or 355.76 points, at 39,697.30, while the broader Topix index rose 0.90 per cent, or 25.23 points, to 2,818.93.
Japan’s finance ministry spent JPY9.79 trillion (USD61 billion) to prop up the yen between April 26 and May 29.
But analysts now say it is possible traders will keep pushing the envelope to see at what point the government will act, with some saying the currency could hit 170.
The Japanese currency has cratered from around 115 per dollar before February 2022.
This plunge is due in part to the Bank of Japan’s policy of maintaining ultra-low interest rates to support the economy, while other central banks have hiked theirs.
Among major shares in Tokyo, SoftBank Group added 1.97 per cent to JPY10,335, Sony Group climbed 2.14 per cent to JPY13,820 and Toyota gained 0.73 per cent to JPY3,287.
US investors are looking ahead to PCE price data, which is expected to influence upcoming interest rate decisions.
“The Japanese market was seen starting higher following gains on Wall Street,” Monex senior analyst Toshiyuki Kanayama said.
“The focus will be whether Nikkei will be able to widen its gains after a round of buying in the morning”.
Shortly before the opening bell, ministry data showed Japan’s industrial output for May increased 2.8 per cent from the previous month.
