The US dollar strengthened across major currencies as of 4pm ET on the 23rd, driven by robust US labor market data and surging oil prices amid Middle East tensions. The dollar-yen exchange rate climbed to 163.824 yen, up 0.676 yen (0.414%) from the prior New York session close of 163.148 yen, with an intraday peak of 163.986 yen threatening the 164 yen level. The yen is trading at its weakest level against the dollar in approximately 40 years, reflecting Japan's high energy dependence as oil prices rallied. The dollar index (DXY) rose 0.315 points (0.312%) to 101.437, its highest level since the 1st, according to Yonhap Infomax data.
USD/JPY Nears 164 Yen as Yen Hits 40-Year Low
The dollar-yen exchange rate reached an intraday high of 163.986 yen during New York trading hours, continuing to threaten the 164 yen threshold. The yen is maintaining its weakest level against the dollar in approximately 40 years. Ugo Lancioni, senior portfolio manager at Neuberger Berman, stated that "the real value of the yen against not only the dollar but the entire currency basket continues to decline, which could become a concern for authorities."
ECB Holds Rates as Lagarde Signals Possible September Action
The European Central Bank held all three policy rates unchanged on the 23rd. The euro-dollar exchange rate fell 0.00318 dollars (0.279%) to 1.13794 dollars. ECB President Christine Lagarde stated at a press conference that "some policymakers asked whether we should consider raising rates today," signaling she did not rule out a rate hike in September.
Dollar Index Reaches Highest Level Since the 1st Amid Middle East Tensions
The dollar index extended gains during New York trading, reflecting escalating Middle East conflict. The UK Maritime Trade Operations (UKMTO) announced on the 23rd that a tanker was attacked in the Red Sea southwest of Saudi Arabia. Houthi rebels claimed they conducted military operations targeting two Saudi tankers, following their warning earlier this week of a maritime blockade against Saudi Arabia.
US-Iran tensions intensified as President Donald Trump told Axios, "I am considering a massive attack. Bigger than ever before. I am on the verge of making a decision. We have completed all preparations for this." Brent crude oil for September delivery closed at $100.69 per barrel, surging 7.04% from the prior session—the first close above $100 since May 22. The dollar index reached an intraday high of 101.524 reflecting these developments.
US Jobless Claims Hit 55-Year Low
The US Department of Labor reported that initial jobless claims for the week ending the 18th totaled 187,000 on a seasonally adjusted basis—the lowest level since September 1969. The strong labor market data reinforced dollar strength across currency pairs. The pound-dollar exchange rate fell 0.00556 dollars (0.416%) to 1.33180 dollars, while the offshore dollar-yuan (CNH) rate rose modestly by 0.0029 yuan (0.043%) to 6.7780 yuan.
TD Securities: Dollar Rally Unlikely to Sustain
TD Securities stated in a report on the 23rd that the dollar recorded its highest level in three weeks as a safe-haven asset, but assessed that "the possibility of a sustained sharp rise in the dollar appears small." The firm explained, "This is because we do not expect a return to the extreme interest rate differentials seen in 2022, when the Federal Reserve's rate hike cycle significantly outpaced other major central banks."
![Dollar Index Intraday Movement]()
Dollar Index Intraday Movement [Source: Yonhap Infomax]
FAQ
What drove the US dollar's strength on the 23rd?
The US dollar strengthened due to robust US labor market data showing initial jobless claims at a 55-year low (187,000 for the week ending the 18th) and surging oil prices driven by Middle East tensions, including Houthi attacks on Saudi tankers in the Red Sea and escalating US-Iran conflict rhetoric.
Why did the dollar-yen exchange rate approach 164 yen?
The dollar-yen rate climbed to an intraday high of 163.986 yen, nearing 164 yen, reflecting Japan's high energy dependence as Brent crude oil closed above $100 per barrel for the first time since May 22. The yen is trading at its weakest level against the dollar in approximately 40 years, with Neuberger Berman noting the yen's declining real value against the entire currency basket as a potential concern for authorities.
