Geopolitical risks, fiscal concerns and wide interest rate differentials continue to weigh on the Japanese currency
Published Wed, Jul 22, 2026 · 07:14 AM
[TOKYO] The yen weakened past 163 per US dollar for the first time since 1986, raising the risk of intervention by authorities to prop up the currency.
Japan’s currency weakened to as low as 163.24 against the US dollar. The move came as the greenback rose along with US Treasury yields as renewed tensions in the US-Iran war pushed up oil.
Geopolitical risks, fiscal concerns and wide interest rate differentials have continued to weigh on the yen despite authorities spending 11.73 trillion yen (US$71.9 billion) from Apr 28 to May 27 to defend the currency.
Finance Minister Satsuki Katayama used her strongest language in weeks to warn of possible intervention in the currency market last week.
“If oil prices stay elevated and there’s no intervention, (the) dollar-yen (pair) is likely to continue to grind higher,” said Yujiro Goto, chief FX strategist at Nomura Securities, in a note.
“The response from authorities will remain the key focus today,” Goto said.
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The yen’s slide to the weakest level since December 1986 – coupled with higher global yields and rising energy costs – leaves Japanese authorities dangerously short of effective policy responses, said Bloomberg macro strategist Brendan Fagan. BLOOMBERG
