Yen plunges to 40-year low past 162 per dollar

Key Facts

With the US dollar strengthening on the Federal Reserve's hawkish policy stance, the Japanese yen weakened past 162 per dollar, hitting a 40-year low, according to the Financial Times. This sharp decline underscores the dollar's dominance backed by expectations of further rate hikes, putting pressure on other currencies, particularly the yen which suffers from the wide yield gap between Japan and the US.

The selling wave on the yen comes amid repeated signals from the Bank of Japan that it will not rush to adjust its ultra-loose monetary policy, keeping the interest rate differential with the US wide. Japanese officials have recently warned of possible intervention in the forex market, but that has not stopped the yen's slide. The last time the yen traded near these levels was in 1986, when Japan's economy was in the peak of its asset bubble.