Yen briefly hits 162 per dollar, weakest since 1986

2026-06-30

Yen falls to 162 per dollar

In Tokyo foreign exchange trading on the 30th, the yen briefly fell to the 162-yen level against the dollar. That marked the weakest yen and strongest dollar level since December 1986, or about 39 and a half years. Expectations of additional rate hikes in the United States to counter a resurgence in inflation strengthened, driving dollar buying and yen selling.

US rate hike bets underpin yen

The yen had briefly weakened to around 161.98 in New York on the 29th. In Tokyo on the 30th, it traded in the 161.90-yen range before yen selling accelerated at one point to the 162.40-yen range after it fell below 162, seen as a psychological threshold. At 5 p.m. Japan time on the 29th, it was in the 161.80-yen range.

Intervention warnings and yen-selling factors

The yen also briefly fell to 161.96 in July 2024, marking its weakest level since 1986. At that time, the yen had been strengthening and the dollar weakening after the Plaza Accord, in which major economies acted in coordination to correct a strong dollar, but the current move is in the opposite direction.

US economic indicators are firm, and even amid concern over a global slowdown, the resilience of the US economy is likely to remain in focus. In the market, speculation has emerged that the Federal Reserve will raise rates one or two times by year-end. While the Bank of Japan is moving ahead with policy normalization, its policy rate remains at 1.0%, below the Fed's 3.5% to 3.75% and the European Central Bank's 2.25%. Views that the Sanae Takaichi administration favors maintaining an accommodative financial environment and fiscal expansion are also encouraging yen selling.

The government and the Bank of Japan moved to buy yen after it touched the 160-yen level at the end of April and when it fell to the 161-yen range in July 2024. Now that the yen has again entered a historically weak zone, caution is rising in the foreign exchange market over another intervention. Finance Minister Satsuki Katayama said at a post-Cabinet meeting press conference on the 30th that she would 'respond appropriately at any time as needed' to the yen's recent weakness, and said she had also confirmed in an online meeting of the Japanese and US finance ministers that 'decisive measures' would be included.

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