Is the Weak Yen Trend Ending?... Yen Hits Six-Month High

With the yen-dollar exchange rate, which had previously surged to the 164-yen range per dollar, now stabilizing, there are forecasts that it could fall further.

Yonhap News Agency

On September 7 in the foreign exchange market, the yen-dollar exchange rate at one point traded in the 154-yen range per dollar, marking the strongest level for the yen in about half a year.

There is growing speculation in the market that both the US and Japan will actively work to address the weak yen, especially after Scott Bessent, the US Treasury Secretary, made comments at the G20 finance ministers' meeting earlier this month suggesting that the yen is undervalued and pressuring Japan to raise its base interest rate. The Nikkei has pointed out that financial markets are starting to consider the possibility of a shift in the long-standing trend of yen weakness.

Japan's fiscal authorities launched a joint intervention with the United States, carrying out yen purchases totaling 11.7 trillion yen in April and May, followed by additional yen purchases and dollar sales amounting to 15.3993 trillion yen at the end of July and the beginning of August.

It is being analyzed in the market that, as the resolve of both the US and Japan to correct the weak yen becomes clear, there is growing sentiment to reduce short positions on the yen. Further yen buying and dollar selling following position unwinding could cause the yen-dollar exchange rate to decline even more.

There are also views that whether the phase of yen weakness will persist may be influenced by the US Consumer Price Index (CPI) for August, which is scheduled for release on September 11.

This content was produced with the assistance of AI translation services.