KUALA LUMPUR, July 2 — The Japanese yen weakened to a fresh 38-year low today, crossing the 161 mark to a low of 161.6 against the greenback, mainly attributed to the contraction in Japan’s gross domestic product (GDP) for the first quarter (1Q) of 2024, said Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.
The last time the yen crossed the 161 mark was in December 1986.
Japan’s GDP shrank 2.9 per cent year-on-year in January to March, down from an earlier estimate of a 1.8 per cent contraction.
He said the US dollar stood out from the crowd because the US Federal Reserve seems to be holding on to its hawkish stance and is reluctant to ease its monetary policy.
In a nutshell, the strong US dollar has been prevalent, although data points were not really supportive of the US economy.
“The weak euro, British pound and Japanese yen, key components of the US Dollar Index, have been responsible for the strong US dollar,” he told Bernama.
Meanwhile, at today’s close, the ringgit appreciated against the Japanese yen to 2.9195/9213 from Monday’s close of 2.9254/9278.
On Japan’s new banknotes launch tomorrow, Afzanizam said the measures were perhaps for security reasons rather than policy issues.
According to the Japanese government, nearly 7.5 billion new banknotes will have been printed by the end of March 2025, although existing banknotes will remain valid even after the new bills are introduced.
— Bernama
