Japanese Yen Hits 4-week Low

The Japanese Yen touched 159.84 against the USD, the lowest since July 2026. Over the past 4 weeks, US Dollar Japanese Yen lost 2.23%, and in the last 12 months, it increased 8.71%.

The Japanese yen traded around 159.4 per dollar on Friday, struggling to extend gains from the joint intervention by Tokyo and Washington nearly a month ago as persistent structural weakness continued to weigh on the currency. The wide interest rate gap between Japan and other major economies continued to weigh on the yen, prompting investors to borrow at low rates in the currency and seek higher returns in overseas assets. Rising fiscal concerns in Japan and elevated oil prices linked to the Middle East conflict further reinforced the bearish outlook for the yen. On the monetary policy front, the Bank of Japan is increasingly expected to raise interest rates in September amid concerns over currency weakness and import-driven inflation. Meanwhile, data showed Japan’s unemployment rate fell to 2.4% in July, the lowest in a year, while Tokyo’s inflation rate accelerated to a five-month high in August.

The Japanese yen steadied around 159.2 per dollar on Thursday, remaining within a narrow trading range as investors continued to assess the outlook for Bank of Japan monetary policy. Markets are currently pricing in around an 87% chance of a 25 basis point BOJ rate hike in September to 1.25%, up sharply from about 23% before the central bank’s July meeting. Earlier this week, former BOJ board member Seiji Adachi said the central bank will likely raise rates next month and again as early as January, warning that keeping rates unchanged could trigger another yen selloff and accelerate import-driven inflation. Meanwhile, BOJ Deputy Governor Ryozo Himino said the central bank remains vigilant to inflation risks and will discuss the need for further policy tightening. Elsewhere, BOJ Governor Kazuo Ueda will not attend the Federal Reserve’s annual Jackson Hole symposium this week due to a scheduling conflict.