By Ambar Warrick
Investing.com-- The Japanese yen fell on Monday, coming close to 24-year lows seen last week as growing concerns over slowing economic growth and a strong dollar largely offset the government’s intervention in currency markets.
The yen fell as much as 0.6% to 144.07 against the dollar, trading just a few points off a 24-year low of nearly 146 hit last week. Purchasing managers index (PMI) data released on Monday showed that while Japanese business activity grew in September, growth expectations for the remainder of the year worsened amid increasing headwinds from inflation .
Japanese Finance Minister Shunichi Suzuki warned on Monday that authorities would act again to curb further losses in the yen. His comments come after Japan intervened in currency markets by selling dollars and buying yen for the first time since 1998.
But a former policymaker warned that the Japanese government is unlikely to intervene strongly to support the yen, and would instead act to soothe volatility. Repeated intervention could also attract scrutiny from the United States.
The Bank of Japan has so far shown no indication that it plans to raise interest rates from ultra-low levels, citing continued headwinds from the COVID-19 pandemic.
While Japan recently scaled down COVID-related restrictions in some parts of the country, investors fear that a new outbreak could invite more curbs. High inflation, which was exacerbated by weakness in the yen, is also expected to weigh heavily on economic growth in the coming months.
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