The U.S. dollar index fell 0.7% to 98.91 at 14:49 ET on Thursday, easing pressure on the Japanese yen. The yen surged to as high as 155.30 per dollar, its highest level since August 3, after the currency crossed the 160 mark earlier in the week. Tokyo disclosed that it has spent a record 15 trillion yen (about $99.09 billion) between July 30 and August 26 to bolster the yen.
The euro gained 0.4% against the dollar, trading at $1.1632, while the Australian dollar rose 0.5% to $0.7206. The Canadian dollar slipped 0.4% to 1.3787 per U.S. dollar, with analysts maintaining a year‑end target of 1.35.
U.S. Treasury yields eased, with the 10‑year note down 3.3 basis points to 4.761%, after having peaked at its highest level since November 2023 earlier in the week. In Europe, markets expect the European Central Bank to raise rates by 25 basis points at its upcoming decision.
Eurozone industrial producer prices rose 1.6% month‑on‑month in July, reversing a 0.3% decline in June, and were up 5.8% year‑on‑year, above June's 4.6% gain. In Australia, the June‑quarter gross domestic product expanded 0.4% sequentially and 2.1% year‑on‑year, while the July trade balance posted a surplus of A$1.923 billion ($1.39 billion).
Commentators highlighted the yen move as indicative of intervention. Robin Brooks of the Brookings Institution noted that the sharp yen rise occurred without a widening Japan‑U.S. rate differential, a classic sign of market support. Scott Bessent, a senior U.S. Treasury official, expressed backing for Japan’s decisive steps to address yen undervaluation. Federal Reserve Governor Christopher Waller signaled a willingness to hold the federal funds rate steady if disinflation continues, while Macquarie strategist Thierry Wizman warned that coordinated hawkish stances across major central banks could keep the dollar strong despite high oil prices.
The confluence of Japan’s currency intervention, divergent monetary policy expectations, and mixed economic data across regions is shaping short‑term forex dynamics, with the yen’s rally standing out as the most pronounced move among major currencies.
