The dollar-yen exchange rate broke below the ¥155 defense line, plunging temporarily to the upper ¥152 range. Against the backdrop of Bessent's remarks, pressure to correct the dollar's strength has intensified, and choppy trading is expected ahead of the US CPI release and US-Japan central bank meetings.
The dollar-yen exchange rate fell below ¥155, which had long served as a strong floor, temporarily declining to the upper ¥152 range. The move reflected expectations of a BOJ rate hike, the repatriation of funds by domestic institutional investors, and the cooling effect on market sentiment of US Treasury Secretary Bessent's pressure to correct the yen's weakness.
The market is concerned that the US Treasury is signaling an emphasis on correcting the dollar's strength. A shift in fiscal and trade policy aimed at moderating dollar strength may be prompting investors to unwind short-yen positions.
Although there were rumors about coordinated US-Japan intervention, no official intervention has been confirmed. The fact that the exchange rate broke below ¥155 without intervention suggests that the yen's natural rebound, driven by underlying demand and position adjustments, is leading the move.
The focus going forward will be whether ¥155 functions again as resistance and how much further the exchange rate can fall after breaking below ¥152. If dollar selling accelerates on the US CPI release or the BOJ signals a more forward-looking monetary policy stance at its meeting, a narrowing US-Japan interest-rate gap could become more likely, potentially driving the exchange rate toward the ¥150 range. Sensitivity to moves around parity is also likely to increase.