Yen and Yuan Watch: USD/JPY and USD/CNY Daily — 2026-09-11

Top developments

Yen Surges Past 155, Triggering Carry-Trade Unwinds

On September 8, the yen strengthened significantly against the dollar, breaking below the critical 155 level for the first time since February. This move surpassed the peak reached during earlier coordinated interventions by Japan and the US, driven by expectations of a Bank of Japan (BoJ) rate hike next week and liquidation of long-dollar positions. The rapid appreciation has forced investors to unwind yen-funded carry trades, contributing to volatility in global equity markets and raising concerns about broader financial stability.

PBoC Sets Weaker Fixings to Aid Exports

The People's Bank of China (PBoC) set the USD/CNY central reference rate at 6.7766 on September 10, weaker than the Reuters estimate of 6.7104, signaling a desire to slow the yuan's appreciation or even encourage depreciation to aid Chinese exporters. Earlier in the week, on September 8, the PBoC also set a fixing higher than expected (6.7804 vs 6.7104 estimate), which briefly slowed the offshore yuan's (CNH) decline after it hit its lowest level since February 2023. These moves highlight Beijing's balancing act between preventing excessive volatility and maintaining export competitiveness.

Carry Trade Shifts from Yen to Yuan

As the yen's volatility increases due to BoJ tightening expectations, strategists note that the Chinese yuan is gaining renewed attention as a funding currency for carry trades. Investors are seeking alternatives to the increasingly unstable yen, though this shift is tempered by the PBoC's active management of the yuan's value. This dynamic could lead to increased capital flows into higher-yielding assets funded by yuan borrowings, potentially creating new pressure points in emerging markets.

Local view

Japanese media, including Nikkei, reports that the focus has shifted from the efficacy of past interventions to the sustainability of the current rally amid uncertain US-Japan monetary policy divergence. Analysts at Nomura Securities warn that while the yen has appreciated to around 154-155, fundamental interest rate differentials continue to exert downward pressure, suggesting that further intervention may be needed if the trend reverses sharply. In China, local financial outlets like Investing.com China discuss the "weaker-than-expected" fixings as a deliberate tool to manage the 6.70 psychological threshold, with traders closely watching for any signs of the PBoC reintroducing counter-cyclical factors to curb excessive depreciation.

Context & numbers

• USD/JPY: Broke below 155 on September 8, reaching levels not seen since February 2026.
• USD/CNY Fixing: Set at 6.7766 on September 10, compared to a Reuters estimate of 6.7104.
• USD/CNH Range: Briefly traded between 6.7059 and 6.7124 in recent sessions, reflecting tight management despite fixing signals.
• BoJ Meeting: The Bank of Japan is scheduled to meet next week, with markets pricing in a high probability of a rate hike, which is the primary driver of the current yen strength.

On the radar

• BoJ Policy Decision: The upcoming Bank of Japan meeting is the single most important event for USD/JPY; any deviation from expected hawkish guidance could trigger sharp reversals.
• PBoC Fixing Guidance: Traders will monitor the daily USD/CNY fixing for signs of whether Beijing is actively defending a specific level (e.g., 6.70) or allowing gradual depreciation.
• Carry Trade Flows: Monitor equity market volatility as a proxy for the extent of carry-trade unwinding, particularly in tech-heavy indices sensitive to global liquidity conditions.