The yen has fallen to 160 yen per dollar

Yen selling continues stubbornly in the foreign exchange market. The yen has fallen to the midpoint of 160 yen per dollar, approaching the low point before the Japanese government’s intervention in the yen exchange rate at the end of April. Against the backdrop of tensions in Iran and rising market expectations of a US interest rate hike, dollar buying has intensified, and the current yen depreciation can be seen as testing the warning line for further intervention by the Japanese authorities.

“With risk aversion driving dollar buying and market wariness of currency intervention locked in a struggle, the factors supporting the yen’s appreciation are diminishing,” said Motoshige Sakai, head of the Market Business Division of the Foreign Exchange Department at Mitsubishi UFJ Trust Bank, while monitoring the continuously declining yen exchange rate on the morning of June 11.

On June 11, the yen briefly fell to the 160.5 yen per dollar range, approaching the low point of 160.72 yen before the Japanese government and the Bank of Japan (central bank) intervened in the yen exchange rate on April 30. If this level is broken, it will mark a new low for the yen and a new high for the dollar since July 2024. The strengthening of the dollar is mainly due to two reasons, the first being the inflow of safe-haven funds.

On the 10th, the US Central Command announced strikes against multiple targets in Iran. Iranian state media reported that Iranian military authorities have completely blocked the Strait of Hormuz as a countermeasure. Although US President Trump has consistently asserted that a ceasefire agreement is imminent, the situation has become even more tense since the crash of a US Army attack helicopter on the 8th.