USD/JPY Approaches 164 as Dollar Rebounds; FOMC Rate Decision Looms This Week

According to Yonhapinfomax, the dollar-yen exchange rate climbed to 163.852 yen last week, marking its highest level since November 1986 as oil prices surged on Middle East tensions. The pair briefly approached 163.988 yen, approaching the 164 level.

The U.S. Federal Reserve's policy decision is scheduled for July 28-29, followed by the Bank of England on July 30 and Bank of Japan on July 31. Futures markets currently price a roughly 30% probability of a Fed rate hike. Even if the Fed holds rates steady, hawkish guidance could strengthen the dollar further, pressuring the BOJ amid yen weakness. The dollar index rebounded 0.72% to 101.478, while leveraged funds' net short yen positions—a proxy for speculative positioning—resumed growing after briefly declining earlier this month.