Japan’s yen has powered back from 32-year lows on speculation the US central bank will slow its rate increases, stirring hopes among some analysts that a period of historic weakness is coming to an end.
In the past three weeks, the yen has risen from ¥151.94 against the dollar to about ¥139, with most of those moves taking place during US market hours as investors scrutinise signals from the Federal Reserve that it could slow the pace of future rate rises.
The yen’s sharp fall in recent months has caused alarm in Japan as rising bills of imported commodities and food caused the economy to contract in the July to September quarter, the first time in a year. The government recently announced a $200bn spending package to ease the impact on households of surging living costs.