EL7.AI
ForexMedium•23 October 2026•
4 min read

Yen Hits 156.08 per Dollar, Strongest in More Than a Month, Amid Market Concerns

Key Facts

1The dollar touched 156.08 yen on October 23, the yen's strongest level in more than a month, before rebounding to 156.89 by midday.
2The yen was on track for a weekly gain of 0.7% in the week ending October 23.
3The yield on 10-year U.S. Treasuries was 4.9674% on October 23, near its lowest level in a month.
4Japan's annual core inflation exceeded the Bank of Japan's 2% target in September for the first time in nine months.
5U.S. residential building permits stood at an annual rate of 1,400,000 units in September, down 0.2% from revised August.

The yen rose to 156.08 per dollar on Friday, October 23, its strongest level in more than a month, before the pair retreated to 156.89 by midday, according to a Reuters report published by Euronext. The yen was on track for a weekly gain of 0.7%, its largest since early September. A Bank of Japan survey showed the dollar trading between 156.08 and 157.16 yen during the day, while the central rate was 156.45. At 17:00 Japan time, the dollar stood at 156.95 to 156.97 yen. The move highlights the pair's volatility during the session, with a rebound after it hit its low before Japanese trading closed.

The Reuters report linked the risk-off wave to concerns about the sustainability of the artificial intelligence spending boom, while Brent crude futures remained above $110 a barrel. The report said growth concerns outweighed inflation worries in currency moves. The yield on 10-year U.S. Treasuries was 4.9674%, near its lowest level in a month. The yield had fallen on Thursday after stocks declined amid renewed questions about the sustainability of the AI boom. Against this backdrop, demand for the yen supported the Japanese currency as U.S. bond yields fell.

A Deutsche Bank strategist said the yen was "bought as a hedge, not as an investment allocation." The report added that the bank sees no evidence of Japanese institutions repatriating funds. That means the move described in the report was tied to hedging demand amid market turmoil, rather than a sign of returning institutional flows. On the monetary policy front, Japan's annual core inflation exceeded the Bank of Japan's 2% target in September for the first time in nine months. The development puts domestic prices among the factors yen traders are watching ahead of the central bank's meeting.

Most economists polled by Reuters expected the Bank of Japan to hold interest rates at its next meeting, scheduled for Friday of the week after the report, before a quarter-point increase at the December meeting. In the United States, the Federal Reserve's Federal Open Market Committee meets on October 27 and 28, with the press conference scheduled for October 28, according to a correction of the draft report against the official calendar. This differs from the draft's forecast of a rate cut to 4%; the Reuters report said expectations leaned toward rates being held in October, with some economists expecting a later increase in December. The advance estimate of U.S. third-quarter gross domestic product is due on October 29 at 8:30 a.m. The meeting and U.S. data dates will be near-term events to watch for repricing of interest rate and currency expectations.

Data from the U.S. Census Bureau showed declines in building permits and housing starts in September, while housing completions rose month over month. The seasonally adjusted annual rate of permits was 1,400,000 units, down 0.2% from the revised August rate of 1,403,000, and down 3.0% from September 2025. Private housing starts were recorded at an annual rate of 1,221,000 units, 5.2% below the revised August estimate of 1,288,000. Private housing completions rose to an annual rate of 1,192,000 units, up 2.2% from August, but remained 14.0% below September 2025. These figures provide context for upcoming U.S. growth data, while the housing report does not support the claim that permits came in below market expectations.

In Japan, a summary of opinions from the Bank of Japan's September meeting said the economy had recovered moderately, with some weakness appearing partly because of conditions in the Middle East. Bank members said the economy was likely to continue growing moderately, supported by factors including increased global demand related to AI, despite the expected impact of the Middle East on activity. The summary also said economic activity and price data had generally been in line with the July 2026 outlook, while cautioning that risks of prices exceeding that outlook needed to be monitored. This backdrop combines inflation above the bank's target with growth supported by AI-related demand, while activity drivers remain mixed. The next Bank of Japan meeting, followed by its scheduled December meeting according to the Reuters poll, are among the dates that could bring monetary policy back to the forefront of yen trading.