Dollar sinks on yen intervention talk, gold breaks $5,000

27/01/2026

Dollar Slips as Talk Grows of U.S.–Japan Move to Support the Yen

The U.S. dollar weakened in Asian trading on Monday as markets reacted to growing talk that U.S. officials could team up with Japan to support the yen after its recent sell-off. Stock markets started the week quietly, with no strong direction.

The yen jumped sharply after reports suggested the Federal Reserve Bank of New York had reached out to traders about the yen’s exchange rate. That move sparked speculation of possible coordination with Japan, sending the yen up more than 1% to around 153.9 per dollar, its strongest level since November.

The yen had been under pressure for weeks, hit by worries over Japan’s government finances, the Bank of Japan’s decision not to raise interest rates further, and expectations that the U.S. Federal Reserve won’t cut rates at its meeting this week.

Japan last stepped in to support its currency in 2024, when the yen weakened to around 160 per dollar.

Dollar weakens, gold surges

As talk of intervention spread, the dollar fell broadly. The euro, British pound, and South Korean won all gained, while the Singapore dollar climbed to its strongest level in more than 11 years.

A weaker dollar helped push gold prices sharply higher, rising nearly 2% and breaking above $5,000 an ounce for the first time. Silver also continued its rally, jumping above $108 after crossing $100 last week.

Japanese officials added fuel to the speculation. Currency chief Atsushi Mimura said Japan would respond to sharp currency moves and work closely with U.S. authorities if needed. Prime Minister Sanae Takaichi echoed that tone, warning that Japan would act against “speculative and highly abnormal” moves.

Market analysts said the message was clear: betting against the yen is no longer risk-free.

Markets nervous, Fed meeting ahead

Analysts warn that uncertainty around possible intervention could lead to more sharp swings in the dollar-yen pair. With both Japan’s policy direction and U.S. interest rate expectations in play, volatility looks set to stay high.

Gold’s surge reflects broader market anxiety. Investors are rushing into safe assets as geopolitical risks rise, including renewed tensions involving Iran, Venezuela, and concerns about another possible U.S. government shutdown. Strong central bank buying and stubborn inflation are also supporting precious metals.

All eyes now turn to the Federal Reserve meeting this week. The Fed is widely expected to keep rates unchanged after cutting them in previous meetings. Still, investors will be watching closely for any hints of future policy shifts.

Political pressure may also dominate headlines, with former President Donald Trump once again criticizing Fed Chair Jerome Powell and insisting inflation is no longer a problem.

Stocks mixed, oil higher

Stock markets were mixed across Asia. Tokyo fell nearly 2%, hurt by the stronger yen, which weighs on exporters. Singapore, Seoul, and Wellington also slipped. Meanwhile, Hong Kong, Shanghai, Taipei, and Manila posted gains.

Oil prices edged higher after strong gains on Friday, following comments from Trump suggesting the U.S. is increasing its military presence near the Gulf and closely monitoring Iran. Ongoing tensions in the region continue to support energy prices.