The yen has the potential to drop to levels last seen in 1990 on Japan’s deepening monetary policy divergence with the United States, former Finance Ministry official Eisuke Sakakibara has said.
Nicknamed "Mr. Yen” for his ability to influence the currency during his tenure as Japan’s vice finance minister from 1997 to 1999, Sakakibara said the contrast between a hawkish Federal Reserve and the Bank of Japan’s loose monetary policy remains the single biggest driver of the yen’s weakness. Until that gap narrows, the yen is likely to remain under pressure against the world’s reserve currency.
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