Arab News Japan

TOKYO: The yen weakened further in the foreign exchange market on Wednesday, dropping to the 152-yen range against the dollar. This is the first time the yen has fallen to these levels since July 31.

Some Japanese businesses have expressed a sense of crisis as the yen declines and say if the drop continues the impact on Japan will be severe.

In the United States, the view is spreading that the pace of interest rate cuts by the Federal Reserve – America’s central bank – will slow down, with the economy seen to be in good shape. 

But America’s gain and the greater attraction of buying dollars is likely to hurt the yen, especially as the interest-rate gap between Japan and the United States becomes wider. 

In addition, with the US presidential election just two weeks away, the momentum of Donald Trump’s campaign is growing and the expectation that the dollar will strengthen after the election is also seen as a factor in the yen’s weakening.

Many observers believe that if Trump is elected, US finances could see more spending and prices may rise, which has led to an increase in the yield on 10-year government bonds, an indicator of US long-term interest rates.