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Yen rallies as carry unwind lifts USD/JPY below end-2025 levels
USD/JPY slid below 156.70 after late-July US-Japan intervention and trendline break, according to DBS Group Research.
The Japanese yen strengthened versus the US dollar, with USD/JPY moving below its end-2025 level of 156.70, making JPY the best-performing currency against the US Dollar Index in 2026, according to DBS Group Research economist Philip Wee, cited by FXStreet.
Wee said the outlook for USD/JPY faces greater downside risk after a major trendline break, while the late-July joint US-Japan intervention shifted market focus toward Washington and helped reinforce the yen’s haven appeal, weakening the carry trade.
FXStreet also noted that the yen’s gains have kept the US dollar under pressure, even as investors continue to price hawkish expectations for the Federal Reserve.
In the same market wrap, USD/JPY rebounded from a six-month low below 153.00 earlier in the day and traded above 154.00 later, with Japan’s wage growth and a Q2 GDP revision supporting expectations for a Bank of Japan rate move next week.
Latest closeUSD/JPY 158.82 ▼0.9%|Dollar index 99.58 ▼0.1%