Tokyo. In mid-to-late July 2026, the yen traded mostly in the 162–164 range against the US dollar. This meant that the yen until last week of July 2026 approached or touched near-40-year lows, close to the exchange rate of 164 Y/$.
However, a sharp reversal occurred on Thursday, 30 July 2026, during the New York session, soon after opening (forex markets span at least three time zone sessions, first Asia, then Europe, then New York). The yen jumped nearly 5 yen against the dollar in a rapid move.
The yen rose and the dollar dropped from about 158.9 yen at around 4:14 p.m. (20:14 GMT) to about 157.6 yen just before 5 p.m. (21:00 GMT). That is a dramatic move. It is presently trading for Y156.4/$.
Source: Reuters
Massive official foreign exchange intervention
On this day, the Japanese Ministry of Finance had ordered the Bank of Japan to conduct large-scale FX intervention, to the tune of $59 billion. This caused the yen to surge by, at one stage, more than 3% in a single session, and this forced traders with large short positions to close their positions to prevent further losses - for which they needed to buy yen - a classic short squeeze.
The foreign exchange markets can be volatile and the yen-dollar rate (referred to as “dollar-yen” by traders and written as “USD/JPY”, although actually referring to yen per dollar, i.e. Y/$) has witnessed double-digit percentage change swings in annual comparisons many times in the past. So the chances are the yen could soon resume its weakening trajectory, which commenced soon after the 2011 tsunami and nuclear meltdown in Japan. But is this likely? Or have we passed a major turning point?
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