The yen’s rate against the U.S. dollar breached the key ¥150 mark Thursday to hit a fresh 32-year low, amplifying concerns that the weak currency will keep fueling inflationary pressure.
While the precipitous drop in the yen’s value has been a headache, Japan lacks effective measures to stop the trend. Many economists predict that buying pressure on the yen will continue until the pace of rate hikes by the U.S. Federal Reserve slows down around the end of this year or early next year.
“If it takes several months to calm down the weakening trend, (the yen’s rate) could drop to the mid ¥150 range or possibly close to ¥160,” said Takahide Kiuchi, executive economist at Nomura Research Institute, during a TV Tokyo program on Tuesday.