Yen Tumbles Against Dollar Amid Rising Treasury Yields and Japan-US Coordination

The Japanese yen declined against the US dollar on Tuesday, resuming losses that had halted briefly the previous day. The decline came as the US currency strengthened due to rising Treasury yields.

The US Dollar Index rose more than 0.1% on Tuesday and is approaching a two-week high. This followed hawkish comments from Federal Reserve Chair Kevin Warsh at Jackson Hole, which increased expectations of an interest rate hike later this month.

US Treasury Secretary Scott Bessent met with Japanese Finance Minister Satsuki Katayama on Monday and urged Japan to continue raising interest rates and provide markets with a clear vision for fiscal sustainability. Bessent said he believed the Japanese government and Bank of Japan would take measures to support and strengthen the yen.