Yen rises to 156.80 per dollar as U.S. yields fall and safe-haven demand grows
Key Facts
The Japanese yen rose to 156.80 per dollar on Thursday, October 22, 2026, its strongest level since September 18, according to updated coverage from Investing.com, benefiting from safe-haven demand and falling U.S. bond yields. An analysis published on FXStreet by Slobodan Drvenica of Windsor Brokers had tracked a 0.8% decline in the dollar against the yen during late Asian and early European trading. The Bank of Japan's bulletin for the same day showed the dollar moving from 158.15-17 yen at 9 a.m. Japan time to 157.22-24 yen at 5 p.m. Subsequent coverage indicated that the Japanese currency had extended its gains to its strongest level since September. The move came ahead of the next monetary policy meetings in the United States and Japan, against a backdrop of a narrowing yield gap between the two countries.
Behind demand for the Japanese currency, Reuters linked safe-haven flows into the yen to investor concerns over fragile equity markets. The agency cited rising oil prices and the war in the Middle East among the factors driving investors to seek shelter in the Japanese currency. It described the market backdrop as a combination of "fragile equity markets, high oil prices and a war in the Middle East." In its coverage published on October 21, it noted that falling U.S. Treasury yields had also contributed to dollar weakness. This occurred while investors' bullish positions on the U.S. currency were close to a record high, according to London Stock Exchange Group data cited by Reuters. The dollar thus entered its decline while investor positioning remained heavily tilted toward bets on its appreciation.
The scale of the bond market move became clear by the end of Thursday's session, as the 10-year U.S. Treasury yield fell 19.8 basis points, according to Investing.com's end-of-session coverage. The yield closed at 4.951%, its lowest close since September 17. Subsequent FXStreet coverage linked support for the yen to falling U.S. yields and a narrowing spread over Japanese yields. On Japanese monetary policy, the Bank of Japan set its target for the uncollateralized overnight call rate at around 1.25% in its September decision. The bank had held the rate at around 1.0% in its July decision before moving to the higher level in September. The September decision stated that the bank would encourage the overnight call rate to remain "at around 1.25%."
On the technical front, Drvenica's analysis described the move as an attempt to break the floor of a trading range that had held for weeks, with confirmation of the bearish signal dependent on the daily close. The analyst identified 157.50 yen per dollar as the range floor below which a close was required. He said "a daily close below 157.50 is the minimum requirement" for the bearish scenario to continue. The price in the Bank of Japan's 5 p.m. bulletin, as well as the level recorded in subsequent coverage, was below that threshold. The analyst's condition remained tied to the daily close, while the successive prices described dollar-yen movements during Thursday's session.
Attention now turns to the monetary policy meeting schedule in late October, starting with the Federal Reserve. According to the U.S. central bank's calendar, the Federal Open Market Committee holds its next meeting on October 27 and 28. The Bank of Japan follows on October 29 and 30, according to its official schedule. The Japanese schedule includes the release of the Outlook Report, which presents the bank's view, on October 30, coinciding with the meeting's final day. The Bank of Japan then publishes its Summary of Opinions on November 10, the next date listed for the monetary policy meeting documents.