Overview
- The yen has given back roughly half of the late July–early August intervention gains and is trading around ¥159–160 per dollar, a level traders view as a possible trigger for more official buying.
- Markets have rapidly lifted the chance of a Bank of Japan rate increase in September to about 76–80 percent, shifting the focus from one-off intervention to a possible multi‑meeting tightening cycle.
- Soft U.S. data this week — including July CPI, flat PPI, weak payrolls and a surprise drop in retail sales — cut the odds of a September Fed hike to roughly 31–35 percent and changed global policy expectations.
- Analysts and former currency official Mitsuhiro Furusawa say intervention can recur “at any time” but is only a stopgap, and that faster BOJ hikes are the more durable way to arrest yen weakness.
- Wide U.S.–Japan yield gaps and higher oil prices are keeping carry trades and dollar demand alive, raising import costs in Japan and creating risks for global bond flows if the BOJ does not tighten faster.