The yen’s relentless drop continued Friday, as it weakened for an 11th straight day against the dollar on bets further divergence between U.S. and Japanese interest rates are inevitable.
The yen was down just over 0.5% to ¥126.60 per dollar at 3:30 p.m. in Tokyo — extending a 20-year low. Benchmark Treasury yields surged in the U.S. overnight, widening the gap with their peers in Japan. The yen rose slightly to reach ¥126.46 later in the afternoon in Tokyo.
"When liquidity falls due to the Easter holiday, accumulated dollar long and yen short positions would be unwound under normal circumstances, but this time, downside risks to dollar-yen appears to be close to zero,” said Yoshifumi Takechi, chief analyst at Money Partners in Tokyo. "Dollar-yen enters a vacuum at the ¥127 level and there is a high probability markets will next aim for ¥128.”