Australian dollar near three‑month low as yen approaches 39‑year low

The Australian dollar slipped below US$0.690, edging toward its weakest level in three months despite a rebound in domestic employment and a modest drop in the unemployment rate to 4.4%. Reserve Bank of Australia officials said further policy tightening may be needed to bring inflation back to the 2‑3% target range, while a stronger U.S. dollar driven by expectations of later Federal Reserve rate hikes kept pressure on the currency.

The Japanese yen fell to around ¥162 per dollar, a level not seen in 39 years, prompting an urgent phone call between the finance ministers of Japan and the United States. Market analysts note that the yen’s decline is largely tied to the U.S.–Japan interest‑rate differential and the Federal Reserve’s stance. The Bank of Japan has raised its policy rate to 1%, but officials warned that additional moves may be required to reach a neutral rate near 2%. With Japan’s heavy reliance on imported energy and food, a weaker yen raises import‑cost pressures and could fuel domestic inflation. Intervention at the ¥162 level is being closely watched.

Both currencies are reacting to the same global dollar strength, highlighting ongoing concerns for Asian economies about exchange‑rate stability and potential policy responses.