Japanese Yen Hits 4-week Low

The Japanese yen weakened toward 159 per dollar on Wednesday, approaching a two-month low as the US dollar strengthened following hawkish comments from Federal Reserve officials and stronger-than-expected US inflation data. Markets are now assigning approximately a 91% probability to a Fed rate hike next month, up from 84% a day earlier, while additional increases in January and potentially April are also being factored in. The yen remained under pressure despite increasingly hawkish signals from the Bank of Japan, as policymakers broadly agreed that interest rates should continue moving higher, with underlying inflation reaching levels generally consistent with the central bank’s 2% price stability target. BOJ Chief Economist Seisaku Kameda also indicated on Monday that the central bank is likely to raise interest rates in December and continue its monetary tightening cycle into next year.

The Japanese Yen touched 158.85 against the USD, the lowest since October 2026. Over the past 4 weeks, US Dollar Japanese Yen gained 0.13%, and in the last 12 months, it increased 2.6%.

The Japanese yen slipped to around 158 per dollar on Tuesday, surrendering part of its previous session’s gains as hawkish signals from the BOJ failed to provide sustained support for the currency. According to the latest Summary of Opinions, policymakers generally agreed that interest rates should continue rising, as underlying inflation has reached levels broadly in line with the central bank’s 2% price stability target. Some members also called for a faster pace of monetary tightening to bring interest rates closer to neutral, pointing out that businesses have become more resilient to higher borrowing costs. BOJ Chief Economist Seisaku Kameda added on Monday that the central bank is likely to raise rates in December and maintain its tightening cycle next year. Meanwhile, Finance Ministry data confirmed that Japanese authorities intervened in the foreign exchange market in late July to support the yen, purchasing a record ¥15.4 trillion over a three-day period.