Could yen hit 140 against dollar in 2022?

Yen declined on Tuesday against dollar for the third straight session to 24-year lows at 136, opening the door for questions about a collapse towards 140.

Let's explore the factor behind yen's collapse to answer these questions.

We'll then predict future behavior for the yen against major rivals amid monetary policy variance in Japan and the US.

USD/JPY rose 0.8% to 136.03, the highest since October 1998, after yen lost another 0.1% yesterday, the second loss in a row, following a 2.1% tumble on Friday.

BoJ

Bank of Japan's policymakers voted to hold rates at minus 0.10% at the June 16-17 meeting, as expected by most analysts.

BoJ Governor Haruhiko Kuroda said the Bank is ready to even make policies easier and more accommodative if necessary,

Kuroda is expecting inflation to hover near 2% for the time being and thus there's no need to tighten policies under such conditions. 

US Yields

After the Federal Reserve's historic decision to hike rates by 75 basis points to 1.75%, the highest increase since 1994, yields moved rapidly. 

US 10-year treasury yields rose 1.2% on Tuesday for the third straight session on track to hit 11-year highs at 3.5%.

Higher yields obviously support the dollar against major rivals and especially the yen.

Estimates

Now analysts expect a new moving target for the yen towards 138, and even 140 is on the table now.