USD/JPY broke below 155 on Monday, with the yen gaining roughly 1% against every major currency and extending its cumulative advance against the dollar to about 3.3% over the first five September sessions. Rising Japanese government bond yields alongside the currency move suggest traders are pricing a sustained Bank of Japan tightening cycle, not just another intervention-driven squeeze.
Yen's Move Broadens Across Every Major Currency
The yen gained roughly 1% against every major currency on Monday, a broad-based move rather than a dollar-specific one. USD/JPY fell through 155, extending the yen's cumulative gain against the dollar to around 3.3% over the first five trading sessions of September. The pair traded above 160 as recently as last Tuesday.
Separately, technical analysis shows USDJPY down over 1% in Asian and European trading on Monday, with today's break of the 155.20 support zone exposing targets at 152.00 and 150.92 if the pair also clears 154.78.
Rising Bond Yields Point to a Rates Story, Not Just Intervention
Japan's 10-year government bond yield rose to 2.934% alongside the yen. A direct intervention operation would not, by itself, normally require JGB yields to rise, but a more hawkish reassessment of the BoJ rate path would support both higher domestic yields and a stronger currency.
OIS pricing now assigns around an 82% probability of a 25bp increase to 1.25% at the September 17-18 BoJ meeting, up from roughly 75% in earlier coverage. Markets also price an October marginal hike probability around 54.4%, above December's 47.6%, giving the curve a lean toward consecutive moves. US Treasury Secretary Scott Bessent has reportedly been pressing publicly for higher Japanese rates, adding a political dimension to the rate hike debate.
Record Intervention Spending Raises the Stakes
Japan has already spent heavily to defend the currency this year. Foreign reserves fell from $1.287tn in July to $1.207tn in August, a record monthly decline of around $80bn and the fourth consecutive decrease. Japan reportedly spent around ¥15.4tn on yen-supporting intervention in the month through August 26, bringing the 2026 total to roughly ¥27.1tn, already above the prior full-year record of ¥20.4tn set in 2003.
That backdrop is why a shift toward BoJ-led support matters: intervention can move the currency sharply, but repeated operations require increasingly large reserve deployment without changing the underlying interest-rate differential. A genuine tightening cycle does. The next test is whether Monday's move survives once normal trading conditions return, and whether the BoJ keeps October clearly live at its September meeting.
Sources: ActionForex, ActionForex
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