Investing.com – The dollar fell to fresh 17-month lows against the yen on Monday, prompting Japanese government officials to reiterate warnings that they can take measures to weaken the currency.
hit lows of 107.65, the weakest since October 2014 and was last at 107.83.
The dollar fell 3.2% against the yen last week and is down around 10% for the year to date.
Japan’s Chief Cabinet Secretary Yoshihide Suga said Monday the government was closely monitoring the foreign exchange market and added that the moves in the yen were one-sided and speculative.
But investors stuck to the view that Japan will refrain from any direct action to stem the yen’s gains until at least after this week’s G20 meetings in Washington.
The dollar remained weaker against the yen on the view that the Federal Reserve will stick to a cautious approach on hiking interest rates this year amid concerns over the outlook for the global economy.
Lower interest rates make the dollar less attractive to yield seeking investors.
The yen has strengthened broadly since the start of the year as market turmoil sparked from steep falls in China’s stock markets and currency and fears about the health of Europe’s banking sector bolstered safe haven demand.
The Bank of Japan shocked markets with its decision to adopt negative interest rates earlier this year, but despite this the yen has continued to strengthen, posing a challenge to the central bank’s attempts to shore up inflation.
The yen was also higher against the euro, with down 0.24% at 122.93 after a drop of 3.06% last week.
The single currency was lower against the dollar, with easing 0.18% to 1.1380.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 94.28.
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