Japanese Yen Depreciates to Weakest Against Dollar in Seven Years

Source: Financial Times

The Japanese yen plunged to its weakest level against the US dollar in seven years on Monday after its central bank offered to boost its bond-buying program. EWJ is down 1.74%.

• The yen depreciated by over 2% to reach ¥125 versus the dollar, with traders expecting more weakness.
• The currency has already dropped by over 7% so far this month, making March its worst in six years since 2016.
• The depreciation comes after the Bank of Japan offered to purchase unlimited 10-year government bonds.
• The boost in the bond-buying program is in a bid to prevent benchmark debt yields from growing above its policy target.
• Yields reached 0.245% for the first time in six years since January 2016, hitting the upper band of the yield curve control policy.
• Strategists believe the latest move is “policy divergence on steroids,” with the central bank aiming to stop bonds from being driven higher.