Yen’s April Panic Fades as Dollar Retreats From 160
A week ago, USD/JPY was flirting with 160.70 and traders were dusting off their intervention playbooks. This week, the pair closed at 156.85 — its lowest in a month — and nobody is talking about Tokyo anymore.
The speed of the reversal tells you everything about how this market is trading. The April surge in the dollar-yen wasn’t driven by fresh economic conviction; it was momentum and thin liquidity. When the buying stopped, the pair gave back three weeks of gains in five sessions.
Euro and sterling stabilize
EUR/USD has reclaimed 1.1769 after dipping to 1.1677 earlier in the week, and GBP/USD pushed as high as 1.3652 before settling around 1.3595. The pound is now the best-performing G10 currency of 2026 so far, a remarkable run that almost nobody predicted in January.
What changed?
Honestly, less than the price action implies. A few soft US data points were enough to knock the wind out of the dollar rally because positioning had swung so aggressively long. That’s the modern FX market in a nutshell: the fundamentals move slowly, but positioning moves prices fast.
The risk now is the opposite of last week’s. If dollar longs have been flushed out and the US data firms up again, the greenback can rebound just as violently as it fell. Don’t confuse a correction with a trend change.
Disclaimer: This is market commentary, not investment advice. FX trading carries substantial risk of loss.
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