Even if the Bank of Japan decided to loosen its control over the yield curve, the yen's sell-off has accelerated since the difference between Japanese and US interest rates is still persistently large.

Tuesday in New York saw a dip in the value of the Japanese yen to the dollar as low as 151.74 yen. Should the yen surpass the 151.94-yen threshold hit in October 2022, it would plunge to a 33-year low not seen since July 1990.

Additionally, the yen lost value relative to other currencies, hitting its lowest level since 2008 when compared to the euro. Its recent decline against the dollar makes it stand out among its peers.

While rates in Japan are constrained by the underlying weakness of the economy, which the BOJ policy adjustment does little to alter, investors believe that rates in the U.S. and Europe have more potential to rise.

The current long-term interest rates in Japan are 0.95% while the United States are roughly 4.9%. On October 21, 2022, the yen reached its lowest point, with rates of roughly 4.2% and 0.25%, respectively. Both have increased by about the same amount, maintaining the same distance.

This won't alter much if the yield curve control mechanism of the BOJ is adjusted. According to Katsuhiro Oshima, chief foreign exchange analyst at JPMorgan, a 0.1 percentage point increase in Japan's long-term interest rates only results in a 0.5 to 1.30 yen increase in value relative to the US dollar.