The Japanese yen strengthened 1.1% versus the U.S. dollar, reaching its highest level in six months – the first time it touched that range since Feb. 23, 2026. The move came as the Ministry of Finance disclosed that Tokyo had intervened with a record 15.4 trillion yen (about $98.6 billion) to support the currency through Aug. 26. At the end of August, Japan’s foreign securities holdings fell by a record $87.8 billion, underscoring the scale of the defensive effort.
The broader dollar slipped, with the Dollar Index down 0.3% to 98.92. The euro edged up to $1.1600, while the South Korean won traded near 1,346.98 per dollar after briefly hitting 1,334.70 – a level not seen since Oct. 2024. Global investors bought more than 800 billion won (about $598 million) of semiconductor stocks, chiefly Samsung Electronics and SK Hynix.
Market participants assigned roughly a 57% probability to a Federal Reserve rate hike at its Sep. 15‑16 meeting. Money‑market pricing indicated expectations for a 25‑basis‑point benchmark rate increase by the Bank of Japan at its Sep. 18 policy meeting. BOJ Governor Kazuo Ueda and top currency diplomat Atsushi Mimura reiterated that the yen’s recent rally reflects heightened market caution.
The euro‑dollar dynamics were also shaped by expectations of a rate increase from the European Central Bank later in the week. Meanwhile, U.S. investors awaited the Consumer Price Index release following a non‑farm payrolls report, with thin trading volumes after the Labor Day holiday.
Overall, the yen’s surge reflects a confluence of aggressive domestic intervention, shifting expectations for Japanese monetary policy, and a softer dollar amid mixed global rate‑path signals.
