Japanese yen reaches highest level in 5 months after record government intervention

The Japanese yen surged to roughly 155.8 per dollar in early September 2026, its strongest reading against the greenback in five months. That’s a remarkable turnaround for a currency that was flirting with 164 per dollar just weeks ago, a level that hadn’t been seen in nearly four decades. A record-breaking intervention campaign Japanese authorities spent a staggering ¥15.39 trillion buying yen during July and August 2026, the largest intervention campaign ever recorded. To put that in perspective, that’s roughly $100 billion worth of currency market firepower deployed in just two months. The yen had been steadily deteriorating throughout the summer, trading in a range of 159 to 164 per dollar for most of the season. The nadir came in July, when the pair touched approximately 164, putting the yen perilously close to a 40-year low against the dollar. The root cause was familiar: a persistent gap between US and Japanese interest rates. While the Federal Reserve kept rates elevated to combat inflation, the Bank of Japan maintained its comparatively dovish stance. That spread made it a no-brainer for traders to borrow cheap yen and park money in higher-yielding dollar assets, a dynamic...