Photo/Illutration A screen shows the Japanese yen falling to 140 against the U.S. dollar at Co. in Tokyo’s Minato Ward on Sept. 2. (Nobuo Fujiwara)

The Japanese yen plunged to its lowest level in 24 years in New York on Sept. 1, trading at 140 against the U.S. dollar amid speculation of another interest rate hike by the U.S. Federal Reserve Board.

The value of the Japanese currency has fallen by 25 yen against the greenback over the past six months as the Bank of Japan maintains its monetary easing policy to shore up the economy, while the Fed has been raising interest rates since March to curb record high levels of inflation.

Many market players initially expected the Fed would ease up on interest rate hikes due to fears of an economic downturn.

But senior Fed officials have indicated since the end of last week that they would prioritize raising interest rates to counter inflation. Multiple statistics released Sept. 1 showed the U.S. economy remains robust, fueling speculation the Fed would opt for another interest rate hike.

These factors prompted traders to sell yen and buy U.S. dollars, pushing the value of the Japanese currency to its lowest level since 1998, when Japan was hit by a financial crisis following the collapse some years earlier of the asset-inflated bubble economy.

The yen slid against the greenback after key Japanese financial institutions, the Long-Term Credit Bank of Japan and Nippon Credit Bank, now Shinsei and Aozora banks, respectively, went bankrupt that year.

(This article was written by Yuki Kubota and Kyosuke Yamamoto.)