The coordinated Japan-U.S. intervention marked a turning point in the relationship between expectations for a Bank of Japan rate hike and the yen exchange rate, and the dollar-yen pair is expected to remain in a ¥155–¥165 range for the time being.
Coordinated Japan-U.S. yen-buying intervention was conducted at the end of July this year. This strengthened the market's stance against yen depreciation and has restrained dollar-yen moves above ¥160.
The intervention led to a widespread view that the relationship between expectations for a Bank of Japan rate hike and the yen exchange rate had changed clearly, and the market came to accept the view that Japan would respond to U.S. calls for monetary policy normalization.
The market has priced in expectations that rate-hike expectations at the Bank of Japan will rise over the coming year, and the previously established relationship in which stronger rate-hike expectations trigger yen appreciation is said to have returned.
However, the pace of rate hikes is considered unlikely to exceed market expectations. If expectations for a Bank of Japan rate hike recede, pressure for yen depreciation could build again, and the dollar-yen pair is expected to trade in a ¥155–¥165 range.
This article is based on the content of the 10 November 2026 issue of Weekly Financial Affairs.