The Japanese yen fell to its lowest level since 1990 – at 147.88 yen per US dollar. In total, since the beginning of the year, the Japanese currency has lost about 30% in price.

The driver of such a downward trend is the strong difference between the ultra-soft monetary policy of the Bank of Japan and the widespread tightening of monetary policies of other central banks of the world, including the US Federal Reserve. 

The local reason for the further weakening of the yen today was yesterday's data on inflation in the United States. According to a report by the US Department of Labor, consumer prices rose by 8.2% in September, and core inflation was 6.6% year-on-year, updating the highs since 1982. This statistic turned out to be higher than analysts' expectations and again led to expectations of a soon tightening of the US regulator's policy (by 75 bp at a meeting in November).

The Bank of Japan, on the contrary, has been conducting a soft monetary policy since 2016 and maintains the rate at a virtually negative level to support the economy. At the end of September, the Japanese regulator left the rate at –0.1% per annum, promising to keep it at the current level or lower. 

Yesterday, the governor of the Bank of Japan, Haruhiko Kuroda, said that raising interest rates is now inappropriate in light of the economic and price situation in the country. The Japanese economy has just begun to recover from the coronavirus pandemic, so it is necessary to continue stimulating it.