Yen Falls Through 160 Against Dollar, Erasing Intervention Gains

The Japanese yen has broken through the critical threshold of 160 against the US dollar, erasing over half of its gains from a massive state-funded currency intervention just four weeks ago.

The rapid depreciation of the yen increases the cost of Japanese exports and affects automobile import costs in markets like Kenya and Australia where Japanese vehicles dominate.

The collapse was triggered by Federal Reserve Chair Kevin Warsh's hawkish speech at the Jackson Hole symposium, indicating that US interest rates will remain elevated.

Japan spent a record $96.5 billion supporting the currency between late July and August, but this technical breach forces global currency strategists to recalibrate.