Dollar Rises to 159.91 Yen as Markets Price 14.5% Chance of a Large Rate Hike
Key Facts
The dollar rose to 159.91 yen in trading on Friday, November 13, from 159.84 yen in the previous session, according to the Associated Press. The move came as traders priced in a 14.5% chance of a large U.S. interest-rate hike in the following month, according to a Reuters report. The priced-in probability of such an increase was 0% the previous week. The report said some Federal Reserve officials had signaled openness to a 50-basis-point increase if price pressures did not ease. The session’s dollar move thus combined a modest gain against the yen with market bets on tighter U.S. monetary policy.
A Reuters report attributed the dollar’s rise to bets on a larger U.S. rate increase, as Treasury yields climbed. The report linked the higher yields to remarks by President Donald Trump that the United States did not need a deal with Iran. The remarks raised concerns about Middle Eastern supplies, according to the report. Oil prices rose amid those concerns, as did related inflation expectations. Federal Reserve officials said this week that U.S. inflation remained stubbornly high, while some pointed to the possibility of a 50-basis-point increase if price pressures persisted.
The yen briefly touched 160 per dollar on Thursday, November 12, according to a Reuters report citing Japanese Finance Minister Satsuki Katayama. Katayama said on Friday that the government would “respond appropriately to currency fluctuations.” Her remarks came as the dollar neared that level in trading, reaching 159.91 yen on Friday, according to the Associated Press. The price cited in the report does not establish that the dollar tested the 160 level during Friday’s trading. The minister’s comment places the warning about currency fluctuations in the context of market monitoring of yen moves near that level.
EL7’s internal data show that the dollar/yen pair closed at 159.828 on November 12, before Friday trading in which the Associated Press reported a price of 159.91 yen. The Nikkei 225 also rose 0.8% to 61,283.16 points in Friday trading, according to the news agency. Against the backdrop of earlier pressure on the yen, a Reuters report said Japan spent 15.4 trillion yen to support its currency after it fell to 163.99 yen per dollar in late July. These figures date from earlier periods and provide context for Japanese officials’ comments on exchange-rate fluctuations. The U.S. Treasury said Japan had justified its interventions or warnings since 2022 by citing excessive volatility or speculative pressure, and that Japanese authorities say interventions do not target specific exchange-rate levels.
Markets are awaiting Japanese data that could factor into the Bank of Japan’s interest-rate deliberations. The Japanese Cabinet Office’s schedule sets November 16, 2026, for the release of the preliminary estimate of third-quarter GDP. The Japanese Statistics Bureau’s schedule sets November 20, 2026, for the release of October’s consumer price index. A Reuters report said Japanese GDP and October inflation data were due the following week, and both were seen as likely to affect the bank’s plans. The Bank of Japan’s schedule sets its next monetary policy meeting for December 17 and 18, 2026.