Japanese Yen Jumps to 2-Month High Versus Dollar in Possible Intervention

By Jessica Fleetham and Megumi Fujikawa

The Japanese yen jumped by 3% to a two-month high against the U.S. dollar on Thursday, raising the prospect that the Japanese government has intervened to prop up the currency after officials stepped up verbal warnings against speculative moves that threaten to accelerate inflation in Japan.

The move came after the yen recently dropped to a 40-year low of 163.94 per U.S. dollar, LSEG data showed.

The dollar dropped to a low of 157.96 Japanese yen on Thursday, according to LSEG. The DXY dollar index, which measures the dollar's value against a basket of currencies, also fell 1% to 99.890.

Japanese Finance Minister Satsuki Katayama has recently issued verbal warnings.

"Our policy stance has not changed at all. We stand ready to take appropriate and decisive action at any time if necessary," Katayama said last week. Speaking at an event on Tuesday, she reaffirmed that the stance remains intact.

The yen has been under pressure recently, hurt by continued safe-haven demand for the dollar amid mounting Middle East hostilities and concerns about a widening U.S.-Japan interest-rate gap.

A weak yen threatens to drive up Japan's inflation, as the nation relies heavily on imports of essentials such as energy and food. Any sharp jump in import costs could compel the Bank of Japan to more aggressively raise rates, potentially undermining the country's fragile economic recovery.

The U.S. dollar was already under pressure after the U.S. Federal Reserve left interest rates on hold on Wednesday and following weaker-than-expected U.S. GDP data on Thursday.

Write to Jessica Fleetham at jessica.fleetham@wsj.com and Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

July 30, 2026 11:00 ET (15:00 GMT)