Japanese Yen Sinks to 160 Per Dollar

The Japanese yen weakened sharply to 160 per dollar, sinking to its lowest levels in over three decades as traders piled on bets against the currency despite illiquid, holiday-thinned trading in Japan.

Analysts suggested that the move was exacerbated by stops at the key 160 level that are being taken out.

Those losses came as the Bank of Japan refused to yield to market pressure last week, keeping interest rates unchanged.

However, the BOJ dropped wording on buying the same amount of bonds as before, revised its inflation forecasts higher and said the economy will likely keep growing at a healthy pace.

The yen has also lost about 13% against the dollar so far this year as the BOJ held rates at near-zero levels despite high borrowing costs in other major economies, prompting traders to borrow yen and invest in higher-yielding currencies.

Meanwhile, markets continued to watch for intervention signals from Japanese authorities.