{"id":80248,"date":"2026-08-25T23:46:16","date_gmt":"2026-08-25T23:46:16","guid":{"rendered":"https:\/\/www.europesays.com\/japan\/80248\/"},"modified":"2026-08-25T23:46:16","modified_gmt":"2026-08-25T23:46:16","slug":"trade-demand-not-speculation-is-driving-yen-toward-160-per-dollar-curbing-impact-of-japan-intervention","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/japan\/80248\/","title":{"rendered":"Trade Demand, Not Speculation, Is Driving Yen Toward 160 Per Dollar, Curbing Impact of Japan Intervention"},"content":{"rendered":"

The yen is threatening the 160-yen-per-dollar level, with real demand tied to trade settlement driving the currency\u2019s weakness.
\nRising import prices and energy prices have kept imports at record levels, while Japan\u2019s trade balance has posted deficits for three straight months.
\nReal-demand-driven yen weakness will be difficult to stop with foreign-exchange intervention and Bank of Japan rate increases alone, underscoring the need to address structural problems in Japan\u2019s economy.<\/p>\n

Forecast Trend Report by Period<\/p>\n

\"Loading\"LoadingSee more mid- to long-term trend analysis\"Photo:Photo: Shutterstock<\/p>\n

As the yen again threatens the 160-per-dollar level, concern is growing in Japan\u2019s foreign-exchange market that a reprise of the real-demand-driven yen weakness seen in the fall of 2022 may be unfolding. The yen has failed to hold gains even after joint US-Japan intervention to buy the currency, while surging import costs for crude oil and other goods are reviving corporate demand to sell yen.<\/p>\n

Nikkei reported on Aug. 26 that the latest bout of yen weakness has been driven less by speculative players such as hedge funds than by real demand tied to trade settlement. Speculative short-yen positions based on US Commodity Futures Trading Commission data stood at about $4 billion as of Aug. 18, roughly one-third of the $12 billion level seen before the joint US-Japan intervention.<\/p>\n

Japan\u2019s import burden, by contrast, is climbing quickly. After tensions involving Iran worsened, prices for crude oil, naphtha and other energy products rose, pushing import-price growth above export-price growth starting in April. Import prices have recently continued to rise by around 30% from a year earlier.<\/p>\n

Trade data for July released by the Finance Ministry showed imports reached a record high for a second straight month, partly because of higher crude procurement costs. Japan posted a trade deficit for a third consecutive month. As importers buy dollars and sell yen to settle payments for crude oil and other goods, pressure builds for the exchange rate to rise.<\/p>\n

Markets are again drawing comparisons with the yen\u2019s slide in the fall of 2022. At the time, international commodity prices surged after the war in Ukraine, sending import-price growth to nearly 50% and sharply increasing yen selling tied to real demand. The yen moved from the 130-per-dollar range in August 2022 to above 150 in just two months.<\/p>\n

Current import-price growth is not yet as steep as it was then. Even so, concerns are mounting that the rise in energy prices linked to the Iran situation is only beginning to accelerate. Consumer-price data for last month also showed early signs that higher crude oil and naphtha costs were starting to feed through to food and durable-goods prices.<\/p>\n

The problem is that yen weakness driven by real demand is difficult to stop through foreign-exchange intervention alone. Corporate trade settlement continues regardless of the exchange-rate level, meaning government yen buying aimed at speculative players may have only limited effect.<\/p>\n

There is also a view that the possibility of an additional Bank of Japan rate increase this fall has already been largely priced in. Ultimately, breaking the cycle of yen weakness and imported inflation will require Japan to tackle structural problems in its economy, including its dependence on energy imports.<\/p>\n

Choi Man-su, Tokyo correspondent, Korea Economic Daily, bebop@hankyung.com<\/p>\n","protected":false},"excerpt":{"rendered":"The yen is threatening the 160-yen-per-dollar level, with real demand tied to trade settlement driving the currency\u2019s weakness.…\n","protected":false},"author":2,"featured_media":80249,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[2670,2664,2674,2662,2663,2669,2668,2666,2665,2667,2673,191,189,2671,188,190,2672],"class_list":["post-80248","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bitcoin","tag-bitcoincommunity","tag-blockchain","tag-bloomingbit","tag-coincommunity","tag-coininfo","tag-coininvest","tag-coinnews","tag-coinreview","tag-coinstats","tag-cryptocurrency","tag-economy","tag-economy-of-japan","tag-ethereum","tag-japans-economy","tag-japanese-economy","tag-solana"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/80248","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=80248"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/80248\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/80249"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=80248"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=80248"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=80248"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}