The yen consolidates near a 40‑year low against Hi‑U.S. dollar, analysts say, and could weaken further.

"Growing expectations of further interest rate hikes in the United States have strengthened the U.S. dollar," SMBC’s Hirofumi Suzuki says in an email. Heightened tensions in the Middle East have pushed up crude oil prices, placing selling pressure on the currencies of energy‑importing countries. Within Asia, the Japanese yen and Thai baht are particularly vulnerable to this pressure, the chief FX strategist says.

Also, the pace of the BOJ’s tightening has been extremely gradual, Suzuki adds. The dollar is flat at 163.83 yen after touching 163.98 yen overnight, the highest intraday level since 1986, LSEG data show.

Investors are watching the yen’s trajectory closely as BOJ policy, U.S. rate expectations, and oil‑price dynamics converge. A further dip could impact import costs for Japan and risk‑ פילע investors seeking safe‑haven assets.