The dollar drops below 140 yen for the first time since last September, shaking currency markets on Tuesday. Investors reacted strongly after U.S. President Donald Trump criticized Federal Reserve Chair Jerome Powell for not cutting interest rates.
Trump, through multiple social media posts, urged the Fed to act preemptively. He claimed that many support interest rate cuts to stabilize the U.S. economy. This direct pressure on the Fed triggered concerns about the central bank’s independence.
As a result, the dollar briefly dipped to 139.89 yen. This marked the first time the dollar drops below 140 yen in months. Currency analysts noted that fears about political influence on the Fed drove the sudden decline.
Sony Financial Group’s Kumiko Ishikawa said market players worried more about central bank independence than additional rate cuts. She emphasized that caution, not economic outlooks, caused the sell-off.
By 5 p.m. Tuesday, the dollar recovered slightly, trading at 140.28-30 yen. It had stood at 140.83-93 yen in New York and 140.55-57 yen in Tokyo on Monday.
The yen also gained strength on speculation about upcoming talks between Japanese and U.S. finance ministers. Observers believe Washington may urge Tokyo to take action against yen depreciation.
Meanwhile, the euro traded at $1.1505-1506 and 161.40-44 yen, slightly down from the previous session.
The dollar drops below 140 yen as market jitters spread to bonds and stocks. Japan’s 10-year government bond yield rose to 1.305 percent, up by 0.020 percentage point.
Investors also shifted money into gold, another safe-haven asset. Tokyo’s Tanaka Precious Metal Technologies set gold’s price at a record 17,160 yen per gram.
On the stock market, Tokyo’s Nikkei 225 index dropped 59.32 points, finishing at 34,220.60. However, the broader Topix index edged up by 3.19 points to 2,532.12.
Semiconductor-related shares mirrored U.S. losses, dragging down the Nikkei. Still, domestic demand-related stocks gained as investors sought stable sectors.
Sectors like pulp, paper, and wholesale trade led gainers. In contrast, electric appliances and banks saw declines.
The market’s reaction shows rising investor anxiety over U.S. economic policies. Trump’s remarks prompted a quick shift to safer assets and global currency realignments.
Traders will now watch how the upcoming U.S.-Japan finance meeting influences the yen’s direction.
