Yen Strengthens as Tokyo‑Washington Intervention Continues, Dollar Holds Firm Ahead of Jobs Report

The Japanese yen advanced for a third straight session against the euro and the U.S. dollar on Monday, prompting traders to keep a close eye on potential further intervention after coordinated buying by Tokyo and Washington last week.

Oil prices slipped following President Trump’s decision to refrain from a new attack on Iran, while the greenback remained flat ahead of key U.S. employment data. Iran confirmed it is not currently in talks with the United States.

Japan’s finance ministry confirmed that the yen and dollar were jointly purchased in the market and that authorities would not hesitate to act again. The currency also pushed higher against sterling, fueling speculation that Japanese officials could be active in the market.

"A dollar/yen spread of 1.5‑2 standard deviations above the long‑term trend has proven a useful indicator of intervention risk," said Stephen Spratt, APAC developed markets rates strategist at Société Générale. "The current range sits around 162.72‑164.96."

In the Asian session, the yen climbed 1 % to a peak of ¥155.20 per dollar – its strongest level in roughly three months – before trimming some gains. It ended the day 0.39 % higher at ¥156.76. The 200‑day moving average near ¥158 is likely to act as a resistance level, according to Rabobank senior forex strategist Jane Foley.

Against the euro, the yen rose 0.40 % to ¥180.70 after touching ¥179.435, the highest since mid‑November 2025. Bank of Japan data suggest Tokyo may have purchased up to $59 billion worth of yen on Thursday.

The yen’s long‑term weakness has been driven by the BOJ’s gradual tightening stance, which has kept yield differentials wide between Japan and the rest of the world. Barclays analysts note that even if the currency strengthens in the near term, structural downward pressures remain. A Goldman Sachs strategist added that, barring a shift in policy mix or global growth outlook, encouraging repatriation could be the most potent long‑term lever.

Market participants also flagged Japan’s expansionary fiscal policy as a potential drag on the yen.

The U.S. dollar index was largely unchanged at 99.82, after falling more than 1.5 % last week. The euro was up 0.01 % at $1.1523, following a fresh 1½‑month high of $1.1559 in Asian trade.

Easing geopolitical tensions tend to weaken the dollar while supporting the euro and yen as safe‑haven demand recedes and concerns over energy‑exposed economies ease.

"The dollar’s relative resilience likely stems from uncertainty over whether the Fed will raise rates in September," said Chris Turner, global head of forex at ING. "The Fed will probably avoid a September hike unless U.S. data turns markedly weak – a key input coming from this week’s jobs report.

Analysts also noted that the U.S. Treasury’s decision to intervene through the euro may signal a desire to avoid signalling broad dollar weakness.