Yen Set for First Monthly Gain in Five

The Japanese yen held around 153.2 per dollar on Thursday, following a nearly 1% decline in the previous session, as the greenback rebounded after US Treasury Secretary Scott Bessent dismissed speculation of US intervention in the currency market to sell dollars against the yen.

Bessent reaffirmed that the US maintains a “strong dollar policy” and said that solid fundamentals should attract capital inflows, contrasting with President Donald Trump’s earlier indications that a weaker dollar would be acceptable.

Earlier this week, the yen surged roughly 4% to a three-month high amid speculation of a potential joint US-Japan intervention to prop up the yen, following a rate check by the New York Federal Reserve.

Traders remain cautious about the risk of unilateral action from Tokyo, although Bank of Japan data shows that authorities have not officially intervened in the market so far.

Political uncertainty also weighed on the yen in the run-up to the Feb. 8 lower house snap election.

The Japanese yen slid past 153.5 per USD, pulling back from the three-month high of 152.2 earlier on Wednesday as the US presidential administration dismissed speculation of a joint foreign exchange intervention with Tokyo to strengthen the yen.

Speculation that Japan was in contact with the US to limit the slide in the yen gained ground after the New York Federal Reserve conducted a rate check on dollar/yen with market dealers on Friday, while Japanese officials signaled close coordination with the US on currency policy and potential market action.

Traders also remain cautious about the risk of unilateral intervention from Tokyo, although Bank of Japan data indicated that authorities have not officially stepped into the market so far.

Still, the yen remains firmly stronger since the start of January as tariff threats by the US against major trading partners triggered a global dollar aversion.

Additionally, the BoJ is likely to extend its hiking cycle this year.

The Japanese yen traded near 154 per dollar on Tuesday after rallying as much as 3.2% over the previous two sessions amid heightened concerns about a potential joint foreign exchange market intervention by Tokyo and Washington.

The sharp moves were sparked by news on Friday that the New York Federal Reserve conducted a rate check on the dollar/yen with dealers, while Japanese officials indicated that they are in close coordination with the US on currency policy and potential market interventions.

Meanwhile, data from the Bank of Japan suggested that the sudden rise in the yen on Friday was unlikely to have been caused by official intervention.

The local currency also benefited from broader dollar weakness, driven by escalating geopolitical and trade risks, as well as expectations that US President Donald Trump will soon replace Fed Chair Jerome Powell with a more dovish candidate, putting additional downward pressure on the greenback.

The Japanese yen strengthened to around 155 per dollar on Monday, rising about 2% over two sessions to its strongest level in more than a month, as markets priced in the growing risk of coordinated intervention by Tokyo and Washington to support the currency.

On Sunday, Prime Minister Sanae Takaichi said the government would take “necessary steps” to counter speculative market moves, reinforcing official resolve to stabilize the yen.

Additional momentum came from reports that the New York Federal Reserve had checked dollar/yen levels with dealers on Friday, a move widely interpreted as preparatory groundwork for potential joint intervention in the FX market.

The yen also drew support from broad-based dollar weakness, driven by elevated geopolitical and trade risks, alongside expectations that President Donald Trump may soon replace Fed chair Jerome Powell with a more dovish successor, further pressuring the greenback.

The Japanese Yen touched 155.68 against the USD, the highest since December 2025.

Over the past 4 weeks, US Dollar Japanese Yen lost 0%, and in the last 12 months, it decreased 0.08%.

The Japanese yen steadied around 158.3 per dollar on Friday after falling earlier in the session, following the Bank of Japan’s decision to keep its policy rate unchanged.

Traders remain on high alert for potential intervention by Japanese authorities as the currency continues to hover near multi-decade lows.

The BOJ held rates at 0.75%, as widely expected, after raising it to a 30-year high of 0.75% last month.

The central bank reaffirmed that it is prepared to raise rates if its economic and price projections materialize, having revised four of six inflation forecasts upward.

Traders remain concerned that the yen could face further pressure if the BOJ stops short of clearly signaling additional rate hikes, amid mounting fiscal concerns that have already triggered sell-offs in domestic bonds and the currency.

The policy decision comes after Prime Minister Sanae Takaichi is preparing to dissolve parliament and call a snap election to consolidate power and pursue increased spending.