The value of the Japanese currency may drop as low as 100 yen per U.S. dollar or even more on the speculation that the unexpectedly high pace of the U.S. economic recovery may encourage the Federal Reserve to increase the interest rates faster than the Bank of Japan.

The increasing gap between the U.S. and the Japan’s benchmark rates gave reason to believe that the currency may drop as low as 100 yen per dollar or even 105 yen/dollar. The increase of the federal fund rates by the Fed has inspired speculations about the increasing demand for the U.S. bonds. The yield on the 10-year U.S. bonds may reach about 4 percent in the course of the year as the Fed normalizes interest rates.

USD/JPY jumped to about 93.57 as of 10:29 GMT after it opened at 93.08.

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