Japanese yen at 32-year low against US dollar

 

The Japanese yen touched a 32-year low against the US dollar after official data showed a sharp rise in prices in the US.

The yen fell to 147.66 against the US dollar before regaining some ground.

Japanese Finance Minister Shunichi Suzuki said the government would take "appropriate action" against currency volatility.

In a rare move last month, Japan spent nearly $20bn (£17.6bn) to boost the country's struggling currency.

"We cannot tolerate extreme volatility in the currency market driven by speculative moves," Mr. Suzuki told reporters after attending the G7 Finance meeting in Washington, DC. We are watching currency moves with a strong sentiment. "

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Japanese yen at 24-year low against dollar

Last month, Japan intervened in global currency markets to help support the weaker yen.

The move came after the yen hit a 24-year low against the dollar, marking the first time that Japanese authorities had intervened in the currency market since 1998.

However, analysts warn that such an intervention will have little effect as long as Japan's interest rates remain much lower than those of the US.

The Japanese currency has come under increasing pressure in recent months, mainly due to a very different approach by the Bank of Japan (BoJ) than the US Federal Reserve.

On Thursday, official data showed consumer prices in the US rose higher than expected in the past month, a sign that the inflation battle in the world's largest economy is not over.

Inflation, the rate at which prices rose, in the 12 months was 8.2% in September, up from 8.3% in August.

Rising consumer prices in the US are being closely watched as the Federal Reserve's efforts to pacify inflation have increased the value of the dollar as well as global borrowing costs.

America's central bank is aggressively raising its interest rates to cope with rising prices, which has made the dollar more attractive to investors. In contrast, the BOJ kept rates very low.

The strengthening of the dollar on global financial markets is also affecting other major currencies around the world, including the pound and the euro.