The yen fell today to the average range of 144 units against the euro, its lowest level in more than seven years, after the decision of the European Central Bank (ECB) to undertake an unprecedented rise in interest rates from 0 .75%.
The euro hovered between 143.86 and 144.67 yen on the foreign exchange market during the first leg of trading in Tokyo, the highest level of the community currency against the Japanese currency since January 2015.
The yen has been experiencing an accelerated depreciation due to the divergence of the monetary policies of the Bank of Japan (BoJ) -which is choosing to keep rates at ultra-low levels-, with respect to the rises of its counterparts with greater international influence, such as the ECB and the US central bank.
The Japanese currency came to exceed 144 units per dollar this week, levels of August 1998, due to expectations that the United States Federal Reserve (Fed) will tighten its rate hikes to try to contain the uncontrolled rise in prices and this deepen the difference of its policies with those of Japan.
Today’s depreciation of the yen against the euro comes hours after the European Central Bank announced a 0.75 point hike in interest rates to 1.25% as part of its attempts to curb inflation in the eurozone countries.
Japan maintains the reference rate at -0.1%.
Investors on the Tokyo Stock Exchange did not seem to be swayed by the yen’s move against the euro and instead were carried away by gains on Wall Street following the ECB announcement.
At the break in the mid-session on the Japanese stock market, the Nikkei, the selective benchmark, rose 0.55% or 154.42 points, to stand at 28,219.70 integers.
The broader Topix index, which includes the firms in the main section, those with the largest capitalization, added 0.36% or 7.07 points, to stand at 1,964.69 units.