Overview
- The yen broke above 160 per dollar on Monday after Federal Reserve Chair Kevin Warsh signalled openness to further rate increases, undoing the temporary gains from late‑July coordinated dollar selling.
- Japan’s 10‑year government bond yield climbed to about 2.95 percent on Monday, its highest level since 1996, while two‑year yields hit multi‑decade highs as markets priced stronger BOJ tightening expectations.
- Tokyo and Washington reportedly spent roughly $98.7 billion over the past month trying to support the yen, a record coordinated effort that has so far not stopped the currency’s renewed slide.
- Traders say the growing gap between US and Japanese yields is encouraging carry trades that borrow in yen to buy dollar assets, which amplifies yen outflows and can deepen currency moves.
- U.S. officials call the moves 'contained' but are leaning on Japan to act, with attention now on the September Fed meeting, the Bank of Japan’s next steps, and potential pressure at the upcoming G20 talks.