TOKYO
The Japanese yen weakened past the ¥160-per-dollar level, extending a slide that has wiped out more than half of the gains from the coordinated intervention on July 31—the first joint U.S.-Japan action since 1998.
The yen slipped to ¥160.16, a move that puts traders on watch for renewed official action. The currency has proved vulnerable to the widening yield differential between U.S. Treasuries and Japanese government bonds, a spread that typically persists when the Fed signals resolve on rates.
Federal Reserve Chairman Kevin Warsh recently affirmed the central bank's commitment to its inflation target, a stance the market reads as support for higher rates or a patient hold at current levels. That hawkish signal has bolstered the dollar and weighed on the yen despite Treasury Secretary Scott Bessent's separate efforts to lower long-term U.S. borrowing costs from multiyear highs. The bond market's focus on the Fed's posture appears to have overridden those signals.
The yen's failure to hold above ¥155 earlier this month exposed the underlying depreciation pressure beneath the intervention-driven bounce. Traders are now watching for specific technical levels where Japanese and U.S. authorities might mount another defense, though the currency's rapid erosion of intervention gains raises questions about the durability of official action against sustained macro divergence.
