The yen is falling faster against the euro than the dollar as speculation grows that the European Central Bank will take it easy on cutting interest rates as inflation remains high.
The Japanese currency has weakened 1.5% against the euro this month, approaching the previous record low of ¥171.56 reached on April 29. While the Bank of Japan (BOJ) ended the world’s last negative interest rate policy in March, the interest rate differential with foreign counterparts, including the ECB, remains wide.
There is some disagreement among ECB members over the pace of the likely moves, which has fueled investor expectations that the changes will be gradual. Meanwhile, the British pound rose to its highest level against the yen since 2008 as the Bank of England believed it would also take its time due to persistent inflation.
