Why Is a Sliding Yen Defying Bank of Japan Rate Hikes? | Presented by CME Group

Why Is a Sliding Yen Defying Bank of Japan Rate Hikes? | Presented by CME Group

Most investors are familiar with the complementary relationship of interest rates and currencies, which dictates that central bank rate-hikes will increase the strength of the bank’s native currency as global investors gravitate toward potentially higher returns. In the US, the past year has amply demonstrated that relationship — as the Fed’s anti-inflation efforts drove rates to a 23-year high in July, 2023 the dollar responded by surging towards levels not seen since 2002. That leaves the conspicuous anomaly of the Japanese yen, which responded on March 19 to the Bank of Japan’s first rate-hike in 17 years with a precipitous slide to 34-year lows against the dollar. What factors explain the yen’s outlier status in global currency markets? Presented by @cmegroup: https://www.cmegroup.com/openmarkets/quicktake-by-bloomberg.html?utm_source=youtubeshorts&utm_medium=paid_social&utm_campaign=quicktake_evergreen&utm_content=more_insight
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