The yen was headed for its best day in almost three weeks as Japanese officials discussed the problems tied to a weak currency in meetings with their U.S. counterparts. The currency strengthened as much as 1.2%, the most since Sept. 7, to ¥156.94 per dollar on Friday, outperforming all of its Group-of-10 peers. Prime Minister Sanae Takaichi said that an undervalued currency is “problematic” in a meeting with U.S.
President Donald Trump, adding to traders’ caution over the risk of interventions to buoy the currency. Treasury Secretary Scott Bessent, meanwhile, said he discussed “the desirability of a strong yen” with Finance Minister Satsuki Katayama. Uncertainty over how quickly the Bank of Japan can continue tightening has also weighed on the currency, this week pushing it closer the key ¥160-per-dollar level.
While officials have emphasized the speed and disorderliness of currency moves rather than any specific exchange-rate level, market participants have viewed the area around ¥160 as where intervention risk rises. Options sentiment toward the yen turned more bullish lately, reflecting increased hedging demand against the risk of Japanese intervention. Leveraged traders trimmed back their bullish positions on the yen in the week ending Tuesday, according to Commodity Futures Trading Commission data released Friday.
They’d turned positive on the currency for the first time since mid-2025 a week earlier. Japan and the U.S. carried out their first coordinated yen-buying intervention since 1998 this summer after the currency weakened beyond ¥160. Japan spent a record ¥15.4 trillion ($97.4 billion) intervening in the month through Aug. 26, according to Finance Ministry data.
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