Dollar Yen Tumbles Amid Heavy Selling, BoJ Decision Looms
The US dollar plummeted against the Japanese yen on Thursday, shedding over five yen in just minutes. The USD/JPY pair slid to just above 159.50, down 2.31% and more than five yen from a peak of nearly 164.00. This sudden drop occurred without any scheduled catalyst, with volumes far exceeding normal levels. One desk reported around $8.1 billion in dollar selling across core venues within the next ten minutes.
The yen also gained ground against other major currencies, rising over 2% against the euro and pound and close to 2% versus the Australian dollar in the same window. The move came after US releases showed second-quarter GDP growth of 1.5%, below a consensus estimate of 2.1%. Core PCE inflation printed 0.1% month-on-month.
The focus now shifts to the Bank of Japan's decision on Friday, where economists expect the policy rate to hold at 1.00% after June's increase. The fiscal 2026 growth forecast is seen rising towards 0.8% from 0.5%. Tokyo CPI for July arrived at a year-on-year ex-fresh food measure of 1.9%, exceeding consensus and prior readings.