Bloomberg report of possible faster Bank of Japan rate hikes lifts yen off 40-year low

The dollar climbed to 163.24 yen in New York trade on Tuesday, 21 July 2026, the Japanese currency's weakest level against the dollar since 1986. The yen then edged away from that low on Wednesday, 22 July.

According to a Bloomberg report relayed by CNBC, Bank of Japan officials are open to raising interest rates at a faster pace than economists expect, and the report helped the yen firm briefly. The BOJ raised its policy rate to 1% on 16 June, while the US federal funds rate stands at 3.50% to 3.75%; that rate gap, together with higher oil prices and US Treasury yields, has intensified pressure on the yen.

With the yen still close to levels once seen as Tokyo's red line for currency intervention, speculation has grown that Japan may step into the market to support it.