The US dollar/yen exchange rate fell below ¥155 on 7 September 2026, with the yen rapidly appreciating to temporarily move below ¥153. The background includes expectations of a Bank of Japan rate hike, views on stability in the bond market, and the cumulative impact of intervention. The market's direction could change depending on the course of US rate hikes and movements in crude oil prices.
The US dollar/yen exchange rate fell below the key ¥155 threshold on 7 September, with the yen appreciating and the US dollar weakening by more than ¥10 in just over a month. The yen's appreciation has drawn increased interest from investors in Japan and abroad, and Goto Yujiro (後藤祐二朗) of Nomura Securities provides his outlook.
The background includes expectations of an accelerated pace of Bank of Japan rate hikes and of greater stability in Japan's bond market. Around the G20 meeting, pressure from the US side to correct the yen's weakness also intensified, and some view increased investment in Japanese government bonds by GPIF and Norway's pension fund as having contributed to the yen's appreciation. The recovery in CFTC yen short positions has also been highlighted.
Coordinated intervention may have been the turning point. US authorities indicated pressure on the Bank of Japan and the Japanese government to accelerate rate hikes, which is said to have changed expectations for the Bank of Japan's monetary policy over the medium to long term. The intervention is viewed as temporarily adjusting supply and demand while the market waits for its fundamentals to change.
Looking ahead following coordinated intervention by Japan and the US, an accelerated pace of Bank of Japan rate hikes could support the yen's appreciation and contribute to stability in the government bond market. On the other hand, if crude oil prices remain high, demand for US dollars could increase again, and the yen's direction could change once more depending on oil prices.