The embattled Japanese yen continued weakening to the 158 range against the US dollar in New York on Friday, falling to a fresh 34-year low, after the Bank of Japan kept intact its current monetary easing policy.
The Japanese currency was hovering in the upper 155 range before the BOJ announced its policy decision. But continued yen-selling and dollar-buying sent the Japanese currency to below the 158 line in New York, briefly hitting 158.44, a level that has not been seen since May 1990.
At 5 pm in New York, the yen was quoted at 158.32-42 per dollar, compared with 156.70-71 late Friday in Tokyo.
Market caution that Japanese financial authorities may step in sent the dollar down by nearly two yen for a short period to the upper 154 yen zone in Tokyo earlier Friday.
But the yen soon resumed its downward spiral given the BOJ maintained its policy rate and bond-buying, with the central bank continuing to guide short-term interest rates in a range of zero to 0.1 percent.
US Treasury Secretary Janet Yellen said in an interview with Reuters on Thursday that foreign exchange rates should be determined by market forces and currency intervention is acceptable only in rare circumstances.
The interest rate gap between Japan and the United States remains wide even after the BOJ made its first interest rate hike in 17 years in March. The US Federal Reserve guides its policy rate between 5.25 percent and 5.5 percent, and a recent slate of stronger-than-expected data has reduced expectations that it will lower the rate soon.
