Yen's Depreciation Sparks Concerns Over Asian Currencies

The Japanese yen has been under pressure in recent times, and its depreciation is being closely watched by global financial markets. The U.S. Treasury Secretary Scott Bessant has pointed out that the weakness of the yen has a ripple effect on other Asian currencies, including the South Korean won.

According to Bessant, many Asian currencies move in tandem with the yen, and if it weakens, these currencies also tend to follow suit. He mentioned the South Korean won specifically, stating that it's weak because the yen is weak.

The U.S. has intervened in the foreign exchange market by buying yen, but this hasn't been enough to stem the tide of depreciation. The Bank of Japan has raised its policy rate to 1% in June, but the interest rates in the U.S. are still higher, making it attractive for investors to sell yen and invest in dollar-denominated assets.

The difference in interest rates between the two countries is a major factor driving the yen's depreciation. The Bank of Japan may be inclined to raise interest rates further, but this would require careful consideration of the impact on the Japanese economy, which could suffer from higher borrowing costs.