The yen has dropped Wednesday to a historic low against the US dollar, marking its lowest drop in 20 years following the stricter Fed monetary policies and looser policies implemented by Tokyo.

Though the yen has been seen throughout recent history as a safe currency rarely affected by external circumstances, uncertainty surrounding the Ukraine crisis has caused the currency to tank and fail to bounce back.

Washington implementing policies deemed as strict and more aggressive and the rising oil prices in Japan have also exhausted the currency's efforts to rise and caused it to sink lower.

The yen decreased to 126 on the dollar, reaching its lowest rate since 2002.

The yen had already lost 10% of its value against the USD in 2021 after it had been steady for around four years.

The US central bank has been embarking on a path toward stricter monetary policies in order to compensate for high inflation, which surged US treasury yields and pushed the dollar against the yen.

Earlier, Bank of Japan governor Haruhiko Kuroda said the bank would maintain its monetary easing policies in a bid to reach its long-held 2% inflation target.

"Given the economy and price situation, the Bank of Japan will seek to realize its two-percent inflation target... by resiliently continuing its current powerful monetary easing," he said.

Swiss Bank UBS had pointed out that a weaker yen would negatively affect the purchasing power of the Japanese in addition to the higher import costs that would affect small businesses.

Prime Minister Fumio Kishida, who has not held the premiership for long, did not comment on the yen's dip when asked on Tuesday; instead he stressed the importance of having a stable currency in foreign exchange rates.

"I will refrain from commenting on the level of exchange rates, but their stability is important and I think rapid fluctuations are undesirable," he said.

The US and its allies, including Japan, had rolled out comprehensive sanctions on Russia over the war in Ukraine, which included restrictions on the Russian central bank, export control measures, SWIFT cutoff for select banks, and closure of airspace to all Russian flights. Many of their companies have suspended their Russian operations.

The ramifications of these sanctions have affected the West quite harshly, with Japan being one of many countries whose currency has tanked and ravaged by inflation, causing the purchasing power of its population to sharply decrease.