The Japanese yen has strengthened following monetary policy meetings in Japan and the U.S. It reached the 148-level against the dollar in Tokyo on Thursday. It’s the first time since mid-March it’s reached that high.
Market sources say yen buying quickly gained momentum following the Bank of Japan’s rate hike decision on Wednesday.
BOJ Governor Ueda Kazuo hinted that more hikes could be on the way.
US Federal Reserve Chair Jerome Powell said on the same day that a reduction in its policy rate could be “on the table as soon as the next meeting in September.”
These moves have raised expectations among investors that the rate gap between the two countries will narrow.
The yen’s strengthening on Thursday caused Tokyo’s benchmark Nikkei 225 stock index to briefly lose more than 1,300 points, the largest intraday drop this year.
It ended the day at 38,126, down 2.5 percent.