News Digest: Yen Plunges to 40-Year Low
June 30, 2026
The Japanese yen plummeted to a four-decade low against the U.S. dollar, accelerating its decline and breaching the 162-per-dollar threshold for the first time since 1986, reaching 162.41. The rapid drop has intensified market speculation that Tokyo could step in at any moment. According to a Reuters report, the Japanese government’s intervention in late April and early May involved spending a record 11.7 trillion yen ($72.17 billion) to prop up the currency. This led to a brief strengthening of the yen; however, it came under pressure as traders began to price in rate hikes by the U.S. Federal Reserve later this year.
Speculators have also been emboldened, steadily rebuilding their net short positions in the yen, with the latest weekly data from a U.S. regulator showing short positions of $11.3 billion, near the highest in two years.
However, Finance Minister Satsuki Katayama reiterated that authorities remain fully prepared to respond to volatile currency movements. When questioned if her sense of urgency had escalated, Katayama emphasized that her message remained unchanged.
“It all comes down to being ready to respond appropriately to currency moves at any time,” Katayama stated, noting that appropriate action includes “decisive measures” previously discussed with the United States.
Government sources privately confirmed that the “final warning” issued on April 30—just hours before Japan’s last market intervention—remains active.
Separately, Chief Cabinet Secretary Minoru Kihara stated the government aims to build an economic structure resilient to forex fluctuations while remaining ready to act. Both officials declined to comment on specific currency levels.
The yen remains under immense pressure due to the wide interest rate gap between Japan and the United States, which favors the dollar and incentivizes carry trades. Although a weak yen boosts exporters’ profits, it severely inflates import costs and stokes domestic inflation amid volatile global energy prices.
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