Yen briefly falls to 160.79 per dollar, lowest in 1 year 11 months

2026-06-18

Yen weakens after FOMC and BOJ meetings

The yen was sold against the dollar in New York foreign exchange trading on the 17th, briefly falling to 160.79 per dollar. It slipped below the level seen before the government and the Bank of Japan intervened to buy yen on April 30, marking the weakest yen and strongest dollar in 1 year and 11 months. Expectations for a US rate hike strengthened, and dollar buying spread across major currencies.

Around 3:30 p.m. US Eastern time on the 17th, about 4:30 a.m. Japan time on the 18th, the yen touched 160.79 per dollar. It was the yen's lowest level since the previous yen-buying intervention in July 2024, and selling of the yen on concerns over the widening gap between Japanese and US interest rates dominated the market.

Fed outlook supports the dollar

The Federal Reserve left its policy rate unchanged at the Federal Open Market Committee meeting on the 17th. In the participants' outlook, however, one rate hike by the end of 2026 was the median view, while market expectations were split between one and two hikes a year.

This was the first FOMC meeting for Fed Chair Warsh, who took office in May. The statement was shorter and more concise than before, and explicitly said, 'The FOMC will achieve price stability.' It did not mention maximum employment, and Barclays in Britain views the message as slightly hawkish.

The Bank of Japan raised its policy rate to 1% at its monetary policy meeting through the 16th, but the move was largely priced in beforehand and many saw it as unlikely to support the yen. Following the FOMC participants' outlook, pressure for yen weakness and dollar strength intensified further on the back of the interest-rate gap between Japan and the US.

Intervention caution remains

The government and the BOJ carried out yen-buying intervention on April 30. The yen briefly surged from around 160.70 per dollar to around 155.50, and during the long holiday period in early May it also jumped at one point from the 157-yen range to the 155-yen range.

Finance Minister Satsuki Katayama said at a post-cabinet meeting news conference on June 9 that regarding the yen's weakening against the dollar, 'We remain ready to take resolute measures at all times.'

The stronger dollar also spread to the euro. Against the euro, the dollar briefly rose to 1.1478 per euro, the strongest dollar and weakest euro since the end of March. The dollar index, which measures the greenback's overall strength against major currencies, also rose 0.9% from the previous day to 100.5, at one point reaching its highest level since the end of March.

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