Japanese yen hits 40‑year low near 162 per dollar amid Gulf tensions and intervention fears

The Japanese yen has slipped to around ¥162 per U.S. dollar, its weakest level in four decades. The drop coincides with renewed Middle‑East tensions that have lifted oil prices, bolstered safe‑haven demand for the dollar and sharpened expectations of a Federal Reserve rate hike. The dollar traded at 162.4 ¥, near its strongest point since early July, while the British pound briefly touched ¥218 per dollar.

Analysts warn that the yen’s weakness could trigger intervention by Japanese authorities, though the timing remains uncertain. Goldman Sachs and other strategists note that without a shift in the macro backdrop—higher U.S. yields and limited recession risk—the yen is likely to keep weakening. The situation has revived concerns over the “yen carry‑trade,” where investors borrow yen at low rates to invest in higher‑yielding assets, raising the risk of disorderly unwinding that could affect global markets.

The broader impact includes heightened volatility in currency markets, pressure on emerging‑market currencies and a potential acceleration of inflationary pressures as higher oil prices feed into global price dynamics.