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3d ago

Yen Rallies to Two-Month High After NY Fed Rate Checks Raise Intervention Risk

Traders now price a greater chance of coordinated U.S.–Japan action following Tokyo's warning to counter speculative moves.

Specialist Douglas Johnson works at his post on the floor of the New York Stock Exchange, Thursday, Jan. 22, 2026. (AP Photo/Richard Drew)
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FILE PHOTO: Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. REUTERS/Florence Lo/Illustration/File Photo/File Photo/File Photo
Japanese Yen and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration

Overview

  • The New York Federal Reserve checked dollar–yen rates on Friday, a step dealers view as a precursor to action, sending the pair from about 157.5 to the mid‑155s.
  • The yen extended gains at the Asia open to roughly 154 per dollar, the dollar fell broadly, and the Nikkei slid nearly 2% as liquidity thinned on regional holidays.
  • Prime Minister Sanae Takaichi pledged to take necessary steps against speculative or very abnormal moves, while top currency officials said they are in close contact with U.S. counterparts.
  • Officials have not confirmed any intervention, and market participants are watching Bank of Japan data due Monday evening in Tokyo for signs of official buying.
  • Crowded short‑yen positions are being unwound, and safe‑haven flows lifted gold above $5,000 and silver above $100, highlighting elevated volatility across assets.