Yen soars in New York and dollar falls 2.6% with suspicion of Japanese action on the exchange rate

The US dollar registered a strong depreciation against the yen, reaching its lowest level in two and a half months at the end of trading in New York, on October 30, 2026. The sharp movement generated speculation that Japanese monetary authorities had acted to strengthen the local currency, which had been trading at its lowest levels in decades. The US currency also fell compared to other major global currencies.

Still without official confirmation, several financial market agents indicated that the significant fluctuations in the value of the yen were possibly driven by an intervention. Japan’s Ministry of Finance was approached for comment, but has not issued any statement to date.

Tom Nakamura, who leads the fixed income and foreign exchange areas at AGF Investments, assessed that the scenario points to intervention. “We have not seen any definitive evidence, but we believe it is intervention. The sudden and significant movement in the dollar/yen exchange rate suggests intervention,” said the expert.

The dollar/yen pair registered a drop of 2.6%, closing the session at 159.225 yen per dollar, the lowest level since May 14, 2026. This appreciation of the yen was the most pronounced in recent months.

Roberto Cobo Garcia, who holds the position of head of foreign exchange strategy for the G10 at BBVA, commented on the possible tactic. He said: “It appears that Japanese officials took advantage of the bearish momentum created by worsening US economic indicators to sell dollars and buy yen.”

The yen’s notable appreciation comes a day before the Bank of Japan’s monetary policy meeting, scheduled for October 31, 2026. Market analysts generally predict that the country’s key interest rate will be maintained at 1%. However, recent information indicates that the Japanese economy faces challenges from inflationary pressures, exacerbated by the prolonged war with Iran, which could lead the Bank of Japan to consider faster interest rate increases.

The United States Department of Commerce released on October 30, 2026 that preliminary Gross Domestic Product (GDP) data for the second quarter indicated annualized growth of 1.5%. This result represents an economic slowdown compared to the first quarter, mainly impacted by an expanding trade deficit.

Juan Perez, senior director of trading at Washington-based Monex USA, analyzed the implications for the dollar. He stated: “There is a possibility that the Fed will have to worry more about growth than inflation. That would also be very, very negative for the US dollar.”

The euro also registered an increase, appreciating 0.5% and reaching a price of US$ 1.15318 per euro, continuing the appreciation trajectory observed the previous day.

The British pound appreciated by 0.8%, reaching US$1.34755 per pound.

Meanwhile, the Bank of England has chosen to keep its interest rates unchanged. However, three members of the monetary policy board voted in favor of an increase, indicating an internal debate over the future direction of Britain’s monetary policy.