The yen fell below the 154 line against the U.S. dollar on Monday in New York for the first time in nearly 34 years on receding expectations that the U.S. Federal Reserve will cut interest rates soon amid signs of persistent inflation.

The value of the Japanese currency depreciated against the dollar after Tokyo trading and hovered in the lower 154 range throughout the day in New York, levels last seen in June 1990, after hitting 154.45.

A monitor screen in Tokyo shows the Japanese yen trading in the 154 range against the dollar on April 15, 2024. (Kyodo)

Investors have been selling the yen for the dollar amid the wide rate differential between Japan and the United States, as their central banks have been pursuing divergent ultraloose and tight monetary policies, respectively.

The yen was quoted at 154.22-32 per dollar at 5 p.m. Monday in New York, compared with 153.90-91 late Monday in Tokyo.

While caution over a potential yen-buying intervention by Japanese authorities has persisted, comments on Monday in Tokyo by Finance Minister Shunichi Suzuki reiterating the possibility of such a move did little to stop the yen's downward trend.

The yen has already weakened past levels where Japan previously intervened in October 2022 to arrest its rapid decline, when it inched near the 152 level.

The Bank of Japan recently hiked interest rates for the first time in 17 years, but it has signaled it will maintain an accommodative stance for the time being.

Meanwhile, the U.S. central bank has kept its benchmark interest rate at a 23-year high. A stronger-than-expected economic indicator for March, released earlier Monday, further diminished expectations the Fed will begin cutting rates as early as June.

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