[SINGAPORE] The Singapore dollar stayed above the S$1-to-120-yen mark on Thursday (Nov 20), standing at 120.39 yen as at 6.35pm, after having peaked at 120.64 at around 3pm, Bloomberg data indicated.
The exchange rate first breached the threshold on Wednesday evening.
The Singdollar has appreciated 4.4 per cent against the yen in the year to date.
Mastercard’s Travel Trends 2025 report in May noted that the number of Singaporean visitors to Japan in 2024 hit a record high, thanks to a 40 per cent rise in the Singdollar against the yen – despite airfares and hotels getting pricier.
Christopher Wong, executive director and FX strategist at OCBC, said the Singapore dollar’s relative strength has been largely driven by persistent weakness in the Japanese yen.
“Several factors continue to weigh on the yen, including ongoing fiscal concerns, delayed normalisation of Bank of Japan policy, and geopolitical tensions between China and Japan,” he said.
Wong added that the Japanese government is signalling greater fiscal flexibility. But he said that such fiscal expansion raises concerns over a heavier fiscal burden amid rising debt servicing costs and questions about fiscal discipline, even if it could support growth.
This may “continue to undermine the yen in the near term”, he said.
Although intervention risks are rising as the yen weakens further, he pointed out that that is unlikely to reverse the yen’s broader depreciation trend – instead, it will likely only moderate the pace of decline rather than change its overall direction.
In a note published on Thursday, DBS forecast a “high likelihood of elevated JPY volatility” due to policy risks. It added that investors could monitor intervention risks in the yen and Japanese Government Bond markets.
A separate note from Maybank also stated that the yen “remained under pressure”, even as Bank of Japan Governor Kazuo Ueda reiterated that a hiking cycle would stay intact following a meeting with newly minted Prime Minister Sanae Takaichi.
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