Following coordinated intervention by Japan and the United States at the end of July 2026, USD/JPY briefly plunged into the ¥155 range before recovering to near ¥160. Although the Japan-US interest rate differential is expected to narrow, the market is said to be continuing to move toward yen weakness.
Immediately after coordinated intervention by Japan and the United States, USD/JPY briefly plunged into the ¥155 range. The market then began moving back toward yen weakness, recovering to around ¥161.
Rising long-term interest rates in Japan are supporting yen weakness and US dollar strength. Despite expectations that the Japan-US interest rate differential will narrow, the exchange rate has responded only to a limited extent, and the yen's weakening trend has continued.
In light of the events surrounding the coordinated intervention in 1998, the market could reverse depending on the dollar's vulnerability and whether dollar-selling intervention is carried out.
The US dollar's real effective exchange rate has been trending lower over the long term, and the five-year moving average is also said to have the potential to turn downward. A yen crash versus a US dollar crash is consequently being considered at the same time.