Dollar Holds Near 19-Month High as Yen Nears 160

The dollar held near a 19-month high on Friday as investors weighed the prospect of a larger Federal Reserve interest-rate increase next month, while the yen traded near 160 per dollar and Japan warned it would respond to currency volatility.

The dollar index, which measures the US currency against a basket of peers, stood at 103.17, near its highest level since April 2025. It was on track for a 0.9% weekly gain, its largest since September. The yen was around 159.9 per dollar, near its weakest level since early September.

Japan’s Finance Minister Satsuki Katayama said Friday that the government would respond appropriately to currency volatility. The yen briefly touched 160 per dollar on Thursday, a level that has focused attention on the possibility of intervention. Japan intervened in currency markets in late July after the yen fell to 163.99 per dollar, spending 15.4 trillion yen to support it.

US two-year Treasury yields rose about 34 basis points over the two sessions through Friday, as traders assessed the likelihood of a larger Federal Reserve move. Yields climbed after President Donald Trump said the United States did not need a deal with Iran, and as investors considered...