Dollar Falls as Yen Strengthens Amid Economic and Policy Developments
The U.S. dollar weakened to a two-week low on September 8, 2026, driven primarily by strength in the Japanese yen, which reached a 6.5-month high against the greenback. The yen's rise was supported by positive economic data from Japan and speculation that the Government Pension Investment Fund (GPIF) might increase its allocation to domestic bonds. However, crude oil prices surged over 2%, pushing inflation expectations higher and offering some support for the dollar. The euro edged up slightly against the dollar amid U.S. currency weakness but faced headwinds from weaker-than-expected German trade data in July. The European Central Bank is expected to raise rates by 25 basis points at its September meeting, while markets are pricing a 60% chance of a similar Fed move later that month. Japan's Q2 GDP was revised upward and the August Economic Watchers' survey exceeded expectations, adding momentum for the yen. Meanwhile, gold and silver prices fell as rising oil prices increased inflation concerns.
Topics: central bank policy dollar oil prices yen