Yen rises briefly into 160s on intervention fears and dollar selling

2026-07-02

Yen rises to 160s on intervention fears

In the foreign exchange market on the 2nd, the yen against the dollar briefly surged to the 160s per dollar. It was the first time the yen had traded in the 160s since June 19, or about two weeks. Against a backdrop of historic yen weakness, caution over yen-buying foreign exchange intervention by the government and the Bank of Japan intensified, prompting yen buying and dollar selling.

Yen strengthens by more than 1 yen in Tokyo

In Tokyo trading on the 2nd, the yen at one point traded around 162.60 per dollar. That meant the yen had strengthened and the dollar had weakened by more than 1.50 yen in a single day. A foreign exchange dealer at a domestic bank said, 'Concern over intervention by the Japanese government and the Bank of Japan strengthened further.'

Dollar selling also broadens

According to Reuters and others, a South Korean currency official said on the 2nd that South Korea was working closely with Japan and other related countries to stabilise foreign exchange rates. In the market, such remarks also helped encourage yen buying.

On the other hand, dollar selling also widened. On the 1st, the chair of the US Federal Reserve Board (FRB), Waller, said at an event hosted by the European Central Bank (ECB), 'Risks of inflation are declining', signalling that concerns over further price increases had eased over the past few weeks.

In the foreign exchange market, dollar buying had until now dominated on the back of the US economy's resilience and expectations for additional interest rate hikes. However, following Waller's remarks, that position is being unwound.

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