Dollar-Yen Breaks Above 160 as Japan's Fiscal Expansion Concerns Rise

The yen weakened against the dollar on September 1, breaking above the psychologically significant 160 level.

Long-term Japanese government bond yields rose to levels not seen in roughly 30 years amid concerns over Japan's fiscal expansion agenda.

At 10:00 a.m., the dollar-yen pair stood at 159.79, with U.S. 10-year Treasury yields beginning the session higher in after-hours trading.

The yen's decline was driven by both rate differentials and fiscal factors, including the Ishiba administration's record-high budget requests for fiscal 2027.