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Japanese yen slips for fifth straight session as USD/JPY tops 160

Japan’s latest inflation and labor data reinforced expectations for Bank of Japan tightening next month, while USD/JPY also rose after Jackson Hole comments from the Fed.

Reported · Written up by our desk · Major Pairs

Japan’s yen weakened for a fifth consecutive session as USD/JPY pushed past the 160.00 level, according to FXStreet. The move followed Tokyo’s August inflation and labor figures that the Bank of Japan can use for policy decisions due in early October.

Tokyo consumer prices excluding food and energy rose 2.0% year over year, while the headline CPI increased 1.9%, and unemployment fell to 2.4%. FXStreet noted that subsidies for electricity and gas, reinstated after a Gulf supply disruption raised fuel costs, are expected to suppress the headline rate through October, making the ex-energy measure the cleaner signal.

FXStreet said the data arrived alongside speculation of a Bank of Japan rate increase on September 18, with expectations for a faster pace than the roughly twice-yearly cadence used since 2024. It added that Japanese five-year government bond yields hit a record high on the tightening outlook, including a June move that lifted the policy rate to a 31-year high.

The yen weakness persisted despite Fed comments at Jackson Hole in which the Federal Reserve chair warned the committee still has work to do and lacks confidence that underlying inflation is returning to 2%. FXStreet reported that futures pricing shifted accordingly, with USD/JPY adding about 65 pips since the remarks, and said the key driver for the currency is the interest-rate gap between the two central banks.

Latest closeUSD/JPY 159.15 ▼0.1%

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