Japanese yen
Updated
Summary
The Japanese yen is Japan's currency, issued by the Bank of Japan (BOJ) and the third most traded currency in the world: it was on one side of 16.8% of global FX turnover in April 2025, per the BIS Triennial Survey. Central banks held 4.96% of reported FX reserves in yen in the second quarter of 2026, per IMF COFER. The yen floats, but Japan's Ministry of Finance (MOF) decides on intervention and the BOJ executes it as the Minister's agent, using Japan's roughly $1.18 trillion of reserves. Because Japan imports most of its energy, the yen's value against the dollar feeds directly into fuel, power and food prices at home. Its low interest rates have long made it a funding currency for carry trades, so changes in Japanese rates can move global markets.
Key numbers
USD/JPY (H.10 noon New York rate): 158.00 yen per dollar (as of 2026-10-16). Source: federalreserve.gov
USD/JPY monthly average, September 2026: 156.4171 (as of 2026-09-30). Source: federalreserve.gov
USD/JPY annual average, 2025: 149.5686 (as of 2025-12-31). Source: federalreserve.gov
Yen-buying intervention, July 30-August 26, 2026: ¥15,399.3 billion (daily split UNKNOWN until MOF quarterly detail) (as of 2026-08-26). Source: mof.go.jp
Yen-buying intervention, April-June 2026: ¥11,734.9 billion (April 30, May 4, May 6) (as of 2026-06-30). Source: mof.go.jp
BOJ policy rate (uncollateralized overnight call rate guideline): around 1.25% (as of 2026-09-24). Source: boj.or.jp
Fed funds target range: 3.75-4.00% (as of 2026-09-17). Source: federalreserve.gov
Japan reserve assets: $1,178.4 billion (down $29.1 billion in September) (as of 2026-09-30). Source: mof.go.jp
Import price index, yen basis (y/y): +24.5% (petroleum, coal and natural gas +43.6%) (as of 2026-09-30). Source: boj.or.jp
CFTC non-commercial net position, CME yen futures: net long 50,207 contracts (191,256 long, 141,049 short) (as of 2026-10-13). Source: cftc.gov
Yen share of global FX turnover (of 200%): 16.8% (as of 2025-04-30). Source: bis.org
Yen share of global FX reserves (COFER): 4.96% (5.43% in Q1) (as of 2026-06-30). Source: data.imf.org
Timeline
2026-10-16 — H.10 rate 158.00 yen per dollar, after 158.84 on October 14. (Source: federalreserve.gov)
2026-10-15 — BOJ board member Koeda says the yen's safe-haven role has become less evident and argues the BOJ should not be overly cautious about raising rates. (Source: boj.or.jp)
2026-10-13 — BOJ CGPI: September yen-basis import prices up 24.5% y/y; energy import prices up 43.6%. (Source: boj.or.jp)
2026-09-30 — MOF reports no intervention from August 27 to September 28. (Source: mof.go.jp)
2026-09-30 — IMF COFER: yen share of world reserves falls to 4.96% in Q2 2026. (Source: data.imf.org)
2026-09-25 — Katayama and Bessent call the yen's undervaluation 'a matter of concern'. (Source: mof.go.jp)
2026-09-18 — BOJ raises its policy rate to around 1.25% by 7-2, citing yen depreciation and oil prices. (Source: boj.or.jp)
2026-09-16 — FOMC raises the fed funds target range to 3.75-4.00%, keeping the US-Japan rate gap wide. (Source: federalreserve.gov)
2026-09-03 — Yen at 155.39 per dollar, from 160.03 on September 1, with no Japanese intervention reported. (Source: federalreserve.gov)
2026-08-30 — Bessent tells Ueda the US strongly supports Japan's steps against the yen's substantial undervaluation. (Source: home.treasury.gov)
2026-08-28 — MOF discloses ¥15,399.3 billion of yen buying for July 30-August 26. (Source: mof.go.jp)
2026-08-03 — Katayama confirms a joint yen-buying operation with the US Treasury on July 31 (US Eastern time). (Source: mof.go.jp)
2026-07-31 — BOJ holds at 1.0% by 8-1; Takata dissents for 1.25%. (Source: boj.or.jp)
2026-07-08 — Yen at 162.67 per dollar, near its weakest of 2026 in available H.10 data. (Source: federalreserve.gov)
2026-06-16 — BOJ raises its policy rate to around 1.0%, citing the Middle East situation and crude oil prices. (Source: boj.or.jp)
2026-05-06 — MOF's third yen-buying operation in a week (¥4,675.9 billion), after April 30 and May 4. (Source: mof.go.jp)
2026-04-30 — MOF buys ¥6,278.7 billion of yen, its first operation of 2026; the previous ones AA read were on July 11-12, 2024. (Source: mof.go.jp)
2025-12-19 — BOJ raises its policy rate to around 0.75%. (Source: boj.or.jp)
2025-09-11 — US-Japan finance ministers' joint statement on market-determined exchange rates and intervention only for disorderly moves. (Source: home.treasury.gov)
2025-04-21 — Yen at 140.81 per dollar, its strongest in the window covered here. (Source: federalreserve.gov)
Key actors and links
Bank of Japan (actor:bank-of-japan): Issues the yen, sets the policy rate (1.25%) and executes FX intervention as agent of the Finance Minister.
BOJ intervention (policy:boj-fx-intervention): Yen-buying operations: ¥11.7 trillion in April-May and ¥15.4 trillion in July-August 2026.
USD/JPY (market:usd-jpy): The yen's main traded pair; 158.00 on October 16, 2026.
U.S. Treasury (actor:us-treasury): Joined the July 31 intervention with Treasury funds and has called the yen substantially undervalued.
Federal Reserve (actor:federal-reserve): Its September hike to 3.75-4.00% kept the dollar-yen rate gap wide; New York Fed acted as Treasury's agent in July.
Yen carry trade (theme:yen-carry-trade): Low yen rates fund carry positions; a narrowing rate gap or sharp yen rally can force unwinds.
Yen positioning data (indicator:yen-positioning): CFTC data show speculators net long about 50,200 yen futures contracts on October 13, 2026.
Japan inflation and energy-import pressure (indicator:japan-inflation-energy-imports): A weak yen and dear oil lifted yen-basis import prices 24.5% y/y in September 2026.
Crude oil (commodity:crude-oil): Japan's crude import bill rose 87.8% y/y in July 2026; oil spikes have weakened the yen.
LNG (commodity:lng): LNG import value rose 22.5% y/y in July 2026, adding to yen demand for energy payments.
2026 Iran war (event:2026-iran-war): The Middle East conflict pushed oil up and, per a BOJ board member, the yen down rather than up.
BOJ normalization (policy:boj-normalization): Rate hikes from 0.75% to 1.25% in 2026 have so far not reversed yen weakness.
US dollar (asset:usd): Counter-currency in most yen trading; yen weight in dollar indexes means yen moves shift those indexes.
International Monetary Fund (actor:imf): COFER data show the yen at 4.96% of global reserves in Q2 2026.
CFTC (actor:cftc): Publishes weekly Commitments of Traders data on CME yen futures positioning.
Why it matters now
The yen has been near multi-decade lows all year despite three BOJ hikes. It traded at 158-160 per dollar from March to May 2026, weakened to about 162 in July and was 158.00 on October 16 (Federal Reserve H.10, noon New York time). The mechanism runs through energy and interest rates. Oil prices rose with the Middle East conflict, Japan's fuel import bill jumped (crude import value up 87.8% year on year in July), and yen-basis import prices rose 24.5% in September. That worsens Japan's terms of trade and creates more yen selling to pay for imports. Meanwhile the policy-rate gap with the US stayed wide: the BOJ moved to 1.0% in June and 1.25% in September, but the Fed also hiked, to 3.75-4.00% on September 16. BOJ board member Koeda said on October 15 that the yen kept weakening as crude oil surged and that its safe-haven role 'has become less evident'.
Tokyo has answered with heavy yen buying. MOF bought ¥11.73 trillion of yen in three operations on April 30, May 4 and May 6, and ¥15.40 trillion between July 30 and August 26, including what Finance Minister Katayama called a joint operation with the US Treasury on July 31 (US Eastern time). Washington has openly backed a stronger yen: Treasury Secretary Bessent spoke of the yen's 'substantial undervaluation' on August 30, and both ministers called it 'a matter of concern' on September 25. Yet MOF reports no intervention from August 27 to September 28, and the yen still rallied from 160.03 to 155.39 between September 1 and 3, then drifted back above 158. Speculators are now net long the yen in CME futures (about 50,200 contracts on October 13, CFTC), so a crowded short-yen carry position is not visible in that data, while reserves fell $29.1 billion in September.
Risks and open questions
Bull case: Case for a stronger yen: policy is now pushing in one direction on both sides of the Pacific. The BOJ has hiked three times in ten months, a board member says the neutral rate is likely 'considerably above 1 percent', and the September vote had two dissents. The US Treasury not only tolerates a stronger yen but joined a yen-buying operation in July and has said twice since that the yen is undervalued. MOF still has about $977 billion of foreign currency reserves and a FIMA repo line it says it will use. Speculators are already net long in CME futures, so any further BOJ hawkishness lands on positions that are not heavily short. The US Treasury puts real undervaluation at roughly half since 2011, which leaves room for mean reversion. If oil eases, as the BOJ notes it has from earlier peaks, the import bill and yen selling for energy would shrink.
Bear case: Case for continued weakness: three hikes and ¥27 trillion of intervention in 2026 left the yen near 158, roughly where it started the year at 156.7. The Fed has also been hiking, so the rate gap is still about 2.5-2.75 points and carry remains positive. Japan's energy bill is the main problem: crude import value rose 87.8% in July and yen-basis import prices 24.5% in September, so firms keep selling yen to pay for fuel. Koeda says the yen no longer behaves like a safe haven in crises. Intervention is finite: reserves fell $29 billion in September even without intervention, and each operation's effect faded within weeks. Inference (AA): if the Middle East conflict lifts oil again, the yen could weaken in the very scenario that used to strengthen it, and the BOJ would face higher imported inflation with weaker growth.
Falsifiers: - Bear case fails if USD/JPY falls below 150 and stays there for a month while Brent stays elevated, showing the energy bill no longer dominates. - Bear case fails if the September and October trade releases show mineral fuel imports falling year on year while the yen strengthens. - Bull case fails if the BOJ hikes again on October 30 and the yen weakens anyway over the following two weeks. - Bull case fails if MOF intervenes again and USD/JPY returns above 160 within a month. - Bull case fails if CFTC non-commercials swing back to a large net short, signalling renewed carry positioning. - AA's 'not a safe haven' view fails if the yen rallies sharply during the next risk-off episode tied to the Middle East.
Value accrual gate: Not a crypto asset. Yen strength or weakness does not by itself help or hurt any specific holder: a stronger yen lowers Japan's import bill and raises the cost of yen-funded carry trades, while it cuts the yen value of Japanese exporters' and investors' foreign earnings.
What to watch
Customs September 2026 trade data: does the fuel import bill keep rising? (2026-10-21 (monthly data); detailed release 2026-10-29); Source: customs.go.jp
National CPI for September 2026: pass-through of a weak yen and energy prices. (2026-10-23); Source: stat.go.jp
Weekly CFTC Commitments of Traders: do yen futures positions stay net long? (2026-10-23, then weekly); Source: cftc.gov
FOMC decision and press conference: the US side of the rate gap. (2026-10-27 to 2026-10-28 (press conference 2:30 p.m. Washington time)); Source: federalreserve.gov
BOJ Monetary Policy Meeting: hold or hike from 1.25%. (2026-10-29 to 2026-10-30); Source: boj.or.jp
MOF monthly intervention report for September 29 onward. (around end-October 2026 (monthly pattern; exact date not published)); Source: mof.go.jp
MOF quarterly report with daily dates of the July-August intervention. (early November 2026 (Q2 detail came on August 7; no Q3 date published)); speculative, no scheduled source
AA inference
Inference (AA): the yen is the graph's main transmission point between imported energy, Japanese monetary policy and global carry funding. In 2026 it behaves like an energy importer's currency, not a safe haven: oil shocks weaken it, a weak yen raises import prices, and the BOJ and MOF respond with hikes and intervention. Intervention bought time but did not change the trend, since the yen was back near 158 within weeks of each operation. AA watches four signals: the BOJ decision on October 30, US-Japan rate gaps after the Fed meeting on October 28, monthly yen-basis import prices, and CFTC positioning. The thesis weakens if the yen strengthens decisively while oil stays high, which would show rate expectations or US-Japan coordination now outweigh the energy bill, or if oil prices fall and the yen still does not recover, which would point to capital outflows rather than the trade account as the driver.
Sources
Federal Reserve H.10 noon buying rates in New York: 158.36 yen per dollar on 2026-10-13, 158.84 on 10-14, 158.18 on 10-15 and 158.00 on 10-16 (release of 2026-10-19). (Source: federalreserve.gov, accessed 2026-10-21)
The yen averaged 156.4171 per dollar in September 2026 (Federal Reserve G.5, released 2026-10-01). (Source: federalreserve.gov, accessed 2026-10-21)
The yen averaged 149.5686 per dollar in 2025 (Federal Reserve G.5A, released 2026-01-05). (Source: federalreserve.gov, accessed 2026-10-21)
MOF quarterly report: yen-buying intervention of ¥3,167.8 billion on 2024-07-11 and ¥2,367.0 billion on 2024-07-12. (Source: mof.go.jp, accessed 2026-10-21)
H.10 rates: 156.10 yen per dollar on 2025-12-29 and 156.72 on 2026-01-02. (Source: federalreserve.gov, accessed 2026-10-21)
H.10 rates: 140.81 yen per dollar on 2025-04-21, rising to 143.75 by 2025-04-25. (Source: federalreserve.gov, accessed 2026-10-21)
H.10 rates were 162.28 on 2026-07-06, 162.67 on 07-08 and 161.31 on 07-10. (Source: federalreserve.gov, accessed 2026-10-21)
H.10 rates: 159.74 on 2026-08-31, 160.03 on 09-01, 158.79 on 09-02, 155.39 on 09-03 and 156.11 on 09-04. (Source: federalreserve.gov, accessed 2026-10-21)
MOF quarterly report: Japan sold dollars and bought yen on 2026-04-30 (¥6,278.7 billion), 05-04 (¥780.2 billion) and 05-06 (¥4,675.9 billion); April-June total ¥11,734.9 billion. (Source: mof.go.jp, accessed 2026-10-21)
MOF reported no intervention in January-March 2026. (Source: mof.go.jp, accessed 2026-10-21)
MOF reported ¥0 of intervention for June 29-July 29, 2026. (Source: mof.go.jp, accessed 2026-10-21)
MOF reported ¥15,399.3 billion of intervention for July 30-August 26, 2026; daily detail was not given in the monthly release. (Source: mof.go.jp, accessed 2026-10-21)
MOF reported ¥0 of intervention for August 27-September 28, 2026. (Source: mof.go.jp, accessed 2026-10-21)
Finance Minister Katayama said on 2026-08-03 that MOF bought yen in coordination with the US Treasury on Friday July 31 (US Eastern time) under the September 2025 joint statement, would not hesitate to conduct further joint intervention, and planned to use the Fed's FIMA Repo Facility. (Source: mof.go.jp, accessed 2026-10-21)
FOMC minutes of September 15-16, 2026 describe a joint US-Japan intervention to support the yen in late July in which the New York Fed Desk acted as fiscal agent for the Treasury using Treasury funds; the amount is not disclosed. The FOMC raised the target range to 3.75-4.00%. (Source: federalreserve.gov, accessed 2026-10-21)
In a 9:00 p.m. Tokyo time call on 2026-09-25, Katayama and Bessent agreed that 'the undervaluation of the yen is a matter of concern'. (Source: mof.go.jp, accessed 2026-10-21)
Treasury Secretary Bessent, meeting BOJ Governor Ueda on 2026-08-30, expressed strong support for Japan's market and monetary steps to address the yen's 'substantial undervaluation' and noted yen weakness adds to Japanese inflation. (Source: home.treasury.gov, accessed 2026-10-21)
The US-Japan joint statement of 2025-09-11 says exchange rates should be market determined and that intervention should be reserved for excess volatility and disorderly moves. (Source: home.treasury.gov, accessed 2026-10-21)
US Treasury's July 2026 FX report keeps Japan on the Monitoring List, says the yen is at a multi-decade low against the dollar and in real effective terms, and puts its depreciation from end-2011 to end-April 2026 at about 51%, calling this substantial undervaluation. (Source: home.treasury.gov, accessed 2026-10-21)
BOJ raised its call-rate guideline to around 1.25% on 2026-09-18, effective 09-24, by a 7-2 vote, citing the recent depreciation of the yen and higher crude oil prices as upward price factors. (Source: boj.or.jp, accessed 2026-10-21)
BOJ raised its call-rate guideline to around 1.0% on 2026-06-16, effective 06-17, by 7-1; the statement cites the Middle East situation and higher crude oil prices. (Source: boj.or.jp, accessed 2026-10-21)
BOJ held at around 1.0% on 2026-07-31 by 8-1; Takata proposed 1.25%. (Source: boj.or.jp, accessed 2026-10-21)
BOJ raised its call-rate guideline to around 0.75% on 2025-12-19, effective 12-22, unanimously. (Source: boj.or.jp, accessed 2026-10-21)
BOJ board member Koeda said on 2026-10-15 that the yen's safe-haven appreciation in crises 'has become less evident' and that the yen stayed on a depreciation trend amid a surge in crude oil prices. (Source: boj.or.jp, accessed 2026-10-21)
BOJ CGPI for September 2026 (released 2026-10-13, 8:50 a.m. Tokyo time): import prices up 24.5% y/y on a yen basis and 17.9% on a contract-currency basis; export prices up 17.9% y/y on a yen basis; petroleum, coal and natural gas import prices up 43.6% y/y in yen. (Source: boj.or.jp, accessed 2026-10-21)
Japan's July 2026 provisional trade: imports ¥12.15 trillion (+27.8% y/y), deficit ¥634.5 billion, mineral fuel imports ¥2.68 trillion (+53.5%), crude oil ¥1.41 trillion (+87.8%), LNG ¥548.0 billion (+22.5%). (Source: customs.go.jp, accessed 2026-10-21)
Japan's reserve assets were $1,178,396 million at end-September 2026, down $29,128 million from August, including $976,913 million of foreign currency reserves. (Source: mof.go.jp, accessed 2026-10-21)
BIS Triennial Survey: global FX turnover was $9.6 trillion a day in April 2025 and the yen's share was virtually unchanged at 16.8% (of 200%). (Source: bis.org, accessed 2026-10-21)
IMF COFER for 2026 Q2 (released 2026-09-30): the yen's share of reserves fell to 4.96% from 5.43% in Q1; the dollar's share was 56.70%. (Source: data.imf.org, accessed 2026-10-21)
CFTC COT, CME Japanese yen futures as of 2026-10-13: open interest 373,502; non-commercial long 191,256 and short 141,049 contracts of ¥12.5 million. (Source: cftc.gov, accessed 2026-10-21)