Japanese Yen Remains Under Pressure

2026-08-18 02:16 By Jam Kaimo Samonte 1 min. read

The Japanese yen slipped to around 159.5 per dollar on Tuesday, erasing gains from the previous session amid mounting fiscal concerns and persistent inflationary pressures.

The Takaichi administration’s plan to cut the consumption tax on food to 1% for two years has fueled market concerns, as the government has yet to identify an alternative revenue source and the measure is viewed as an ineffective response to inflation that may not deliver lasting price stability.

Markets also remained concerned about elevated energy costs, which are weighing on Japan’s oil-dependent economy and currency.

Additionally, the yen continued to face pressure from wide interest rate differentials, as surging Japanese government bond yields were offset by a similar rise in US Treasury yields.

Meanwhile, traders are increasingly speculating on a Bank of Japan interest rate hike in September to support the yen and curb inflation.



News Stream
Japanese Yen Remains Under Pressure
The Japanese yen slipped to around 159.5 per dollar on Tuesday, erasing gains from the previous session amid mounting fiscal concerns and persistent inflationary pressures. The Takaichi administration’s plan to cut the consumption tax on food to 1% for two years has fueled market concerns, as the government has yet to identify an alternative revenue source and the measure is viewed as an ineffective response to inflation that may not deliver lasting price stability. Markets also remained concerned about elevated energy costs, which are weighing on Japan’s oil-dependent economy and currency. Additionally, the yen continued to face pressure from wide interest rate differentials, as surging Japanese government bond yields were offset by a similar rise in US Treasury yields. Meanwhile, traders are increasingly speculating on a Bank of Japan interest rate hike in September to support the yen and curb inflation.
2026-08-18
Japanese Yen Gains on Dollar Weakness
The Japanese yen climbed to around 159 per dollar on Monday, recovering some of last week’s losses as the dollar weakened following softer US economic data that eased concerns about an imminent Federal Reserve rate hike. Markets now see roughly a 67% probability that the Fed will hold rates in September, up from below 50% a month ago. The yen also advanced despite preliminary data showing Japan’s economy grew less than expected in the second quarter, as weak domestic demand outweighed robust exports. The economy expanded at an annualized 1.1% in Q2, below market expectations of 2%. Meanwhile, traders remain alert for further currency intervention by authorities amid persistent yen weakness. Markets are also speculating about a possible Bank of Japan rate hike in September or October, amid concerns that a weaker yen could fuel inflation.
2026-08-17
Yen Heads for Weekly Drop
The Japanese yen traded around 159.4 per dollar on Friday and was on track to lose about 1% for the week, as the absence of follow-up intervention from authorities encouraged speculators to continue betting against the currency. The yen has now retraced roughly half of the gains made in late July and early August, when Tokyo and Washington carried out record joint intervention. The currency remained under pressure from longer-term fundamentals, including wide interest rate differentials, growing fiscal concerns and elevated energy and import costs. Meanwhile, markets are speculating about a possible Bank of Japan rate hike in September or October amid concerns that a weaker yen will fuel inflation. US Treasury Secretary Scott Bessent also said Japan should reinforce currency intervention with policies and economic fundamentals that support the yen.
2026-08-14