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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
Amid the widening gap between the Bank of Japan's accommodative policy and the Federal Reserve's hawkish stance, the Japanese yen has fallen to its lowest level in 40 years against the US dollar, according to news reports. This sharp decline reflects the yen's persistent weakness due to the wide interest rate differential between the two economies.
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Sign InThis drop coincides with strong US inflation data, as the annual Super Core PCE rose to 3.94% in May, according to market data, reinforcing expectations that the Fed will keep interest rates high. In contrast, the Bank of Japan maintains its ultra-loose monetary policy, continuing to pressure the yen.
Traders are closely watching Bank of Japan Governor Ueda's speech scheduled for June 24 for any hints of possible intervention to support the currency. Markets also await upcoming US economic data that could increase volatility in the USD/JPY pair, with expectations of Japanese government intervention if the decline continues.