The dollar/yen reached a level of 151.97 yen at one point on March 27th, a level of yen depreciation not seen since 1990.
The immediate trigger for this was a statement by Naoki Tamura, a member of the Bank of Japan’s Policy Board, who said, “We are slowly but surely moving towards the normalization of monetary policy.”
（Bank of Japan Home Page)
Tamura, in a speech last August, stated,
“The realization of the ‘price stability target’ has become clearly visible,” and “I expect the resolution to increase around January to March next year” (in fact, the Bank of Japan stepped into the abolition of negative interest rates in March because it had reached a “situation where the realization of the target can be foreseen”), market participants were on the lookout for Tamura to provide a clue to the next rate hike.
At the beginning of this year, the general market view was that a combination of “the U.S. lowering interest rates and Japan raising them” would lead to a depreciation of the dollar and appreciation of the yen.
However, the Bank of Japan stated in its policy change in March that “assuming the current economic and price outlook, we believe that a relaxed financial environment will continue for the time being,” confusing foreign investors.
Furthermore, since there was no sign of Tamura rushing to raise interest rates, the selling of yen accelerated from the view that “the interest rate difference between Japan and the U.S. will not narrow for a while.”
Tamura’s phrase “slowly” was reported in English news as “slowly”.
On the other hand, in the minutes of the January meeting announced on March 25th, and in the “main opinions” of the March meeting announced on the 28th, the word “slowly” is translated into English as “deliberately“.
