Yen Surges for a Second Month: USD/JPY Cracks Below 157
The yen’s comeback is no longer a one-week wonder.
USD/JPY has fallen from 159.77 at the end of August to below 157 this week, touching 154.06 in Tuesday’s session. That’s a 570-pip drop in three days, and it makes August–September the first sustained yen rally since early 2024. The carry trade, rebuilt so carefully after July’s shock, is being stress-tested again.
What’s different this time
July’s reversal was violent but shallow — positioning got flushed, and the trade rebuilt within weeks. This move has a different texture: it’s slower, broader, and accompanied by actual shifts in Japanese rate expectations. The market is no longer pricing “BoJ on hold forever.” Whether that repricing is justified matters less than the fact that it’s happening — because carry trades die of repricing, not of headlines.
EUR/JPY has fallen from 185.8 to 181.0, its lowest since the July panic. Every yen-funded cross is under pressure simultaneously, which is the signature of institutional deleveraging rather than speculative noise.
Europe’s strange resilience
Here’s what’s odd: the dollar is falling against the yen but holding up elsewhere. EUR/USD sits at 1.1614, unchanged on the week. That means the euro is falling against the yen too — this is a yen story, full stop. For now.
Levels: USD/JPY below 154.00 opens the July low of 152.90, and a break of that would mark a genuine regime change. Above, 159.50 is the ceiling that carry bulls need to reclaim. Between those poles, expect chaos.
Disclaimer: This is market commentary, not investment advice. FX trading carries substantial risk of loss.
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