Yen Steadies Near 156.64 Per Dollar After 2% Weekly Drop, Intervention Watch Persists

The yen firmed slightly to 156.64 per US dollar on September 21, 2026, after a 2% decline last week that prompted speculation of Japanese rate checks. Low liquidity persisted as Japan markets closed for a three-day holiday, keeping traders alert for official intervention. The Bank of Japan raised rates to 1.25% on September 18—a 31-year high—but two dissenting votes and a lack of hawkish guidance disappointed investors. The Nikkei later reported officials conducted rate checks, viewed as a precursor to currency intervention. The dollar index held at 100.23 after gaining over 1% last week following the Federal Reserve's rate hike. CME FedWatch shows traders pricing a 55% chance of an October hike, up from 42.5% a week earlier. The euro was steady at $1.1482 after Germany's far-right AfD won state elections. Sterling traded at $1.339.