Yen Consolidates Near 40-Year Low as Market Awaits Fed Decision

The USD/JPY pair traded at 163.571 on Monday, down 0.13% from Friday's close near 163.78, marking a fresh forty-year low for the yen at 163.99 in the prior session.

Over the past month, the yen has weakened by 1.01%, and over twelve months it is down 10.17%. The distance between these numbers and the record matters: 42 pips. The yen is not recovering; instead, it's consolidating within touching distance of a level it hasn't seen since the mid-1980s.

Monday's market saw the dollar weaken against every one of its G10 counterparts as Brent crude collapsed more than 7% on the US-Iran strike pause. The dollar index eased toward 101.19, and EUR/USD gapped to 1.1420. Gold ran above $4,106.

However, the yen only took 21 pips off the dollar's value, underperforming on a session engineered for it to rally. This suggests that Japan's weakness in the market is structural rather than sentimental.