The Bank of Japan's interest rate hike failed to stop the decline of the yen, and the yen is approaching a 40 year low According to BlockBeats, on June 19th, according to Reuters, despite the Bank of Japan raising interest rates to the highest level in 31 years last week and the Japanese Ministry of Finance intervening in the foreign exchange market multiple times this year, the yen against the US dollar is still hovering near a nearly 40 year low. On Friday, the US dollar was trading at 161.12 against the Japanese yen, not far from the two-year high it had previously hit. The newly appointed Federal Reserve Chairman Kevin Warsh's hawkish stance continues to push up the US dollar, while Japan's core inflation has been below the Bank of Japan's 2% target for the fourth consecutive month, weakening market expectations for further interest rate hikes. Meanwhile, Japanese Prime Minister Hayao Takashi's fiscal spending plan has also raised concerns in the market about the financial situation. DBS Bank stated that after the Bank of Japan raised interest rates this week, the short positions in the Japanese yen in the market have not been significantly replenished, and Japan's tolerance for yen depreciation is approaching its limit. The market expects that when the US dollar/Japanese yen exchange rate approaches the level of 161.95, the Japanese Ministry of Finance may intervene in the exchange rate again. Meanwhile, data from CME FedWatch shows that the probability of the Federal Reserve raising interest rates by 25 basis points in July has risen to 38.5%, a significant increase from 8% a week ago, further strengthening expectations of a strong US dollar. [Original link]