Yen passes key psychological level of 150 and continues to decline

Despite repeated claims of Japanese officials to intervene in order to stabilize the currency market, the yen broke through the psychological level of 150 to the dollar. This was the first time in more than 30 years.

The whole last month, Japan was busy selling the dollar and buying the yen, it was an attempt to support the national currency in the market. It’s worth noting that the spending on intervention has already far exceeded 2 trillion yen. Officials decide to intervene based on how fast the yen changes in price, not how big the rise or fall is. 

Therefore, officials are reacting quite sharply to volatile movements in the yen. Last week at the G7 summit, thanks to the insistence of the Japanese authorities, it was decided that the relevant authorities will closely monitor the situation with volatility in the market.

However, despite the intervention, the yen couldn’t be saved, and the dollar gained 7% against the yen. After September 22 the authorities made interventions, nevertheless, there was an occasional sharp growth of Japan’s national currency.

Although Japanese officials deny defending psychological thresholds, they take into account the charts which inform them of the support level for Japan's currency and other important indicators. It's noted that if the support level drops, the yen will begin to fall as well.

Some analysts predict an even greater fall of the yen against the dollar. According to such predictions, the situation of September 1990, when there was a level of 152.3, may repeat itself. Others talk about the level of 155 and even 160. But at the moment, the Japanese authorities are trying their best to prevent the yen from falling further against the dollar.