The yen continued its downward trend, reaching a fresh 24-year low against the dollar in recent trading sessions. This movement underscores the widening gap between the monetary policies of the Bank of Japan (BOJ) and the US Federal Reserve.

The BOJ has maintained its ultra-loose monetary policy, aimed at stimulating domestic demand and achieving its inflation target. This contrasts sharply with the Federal Reserve’s aggressive interest rate hikes designed to combat rising inflation in the United States.

The divergence in monetary policy has put significant downward pressure on the yen, as investors seek higher returns in dollar-denominated assets. Market analysts are closely watching the BOJ’s response to the yen’s depreciation, as further declines could potentially trigger intervention from Japanese authorities.

Factors contributing to the yen’s weakness include:

• The BOJ’s commitment to negative interest rates.
• Rising US Treasury yields.
• Increased demand for the US dollar as a safe-haven asset.

The yen’s continued weakness poses challenges for the Japanese economy, potentially increasing import costs and putting pressure on businesses. However, it could also benefit exporters by making their products more competitive in international markets.