With the U.S. ISM Report Approaching, Can the Dollar-Yen Pair Recover to the 160-yen Level?

With the U.S. ISM Report Ahead, Can the Dollar-Yen Pair Recover to the 160-yen Level?

01.09.2026 New

In the U.S. currency market the previous day, the U.S. dollar fell against the yen following remarks by U.S. Treasury Secretary Bessent. Mr. Bessent expressed the view that the Japanese government and the Bank of Japan would take measures that would lead to a stronger yen, fueling speculation about a Bank of Japan rate hike in September.The dollar-yen pair traded within a range of about 0.77 yen, between 159.47 and 160.24 yen, and closed near 159.75 yen.The 160.25-yen level is likely to act as resistance, while the 159.50-yen level is expected to provide support. The focus today will be on whether the pair can recover to the 160.00-yen range following the release of U.S. economic indicators.

Among European currencies, the euro rose against the U.S. dollar even as German inflation data came in below market expectations. Germany’s August Harmonized Index of Consumer Prices (HICP, preliminary reading) came in at 2.9% year-over-year, exceeding the previous reading of 2.8% but falling short of the market forecast of 3.1%.Energy prices rose 10.5% year-over-year, but the core index—excluding food and energy—remained flat at 2.4%. The euro traded against the dollar within a range of about 43 pips, between $1.1578 and $1.1621, and closed near $1.1617.The range of $1.1620 to $1.1650 is likely to act as resistance, while the range of $1.1580 to $1.1600 is likely to act as support. We will be watching to see if the pair can hold the key $1.1600 level.

Today’s economic indicators include the revised August Eurozone Manufacturing PMI at 5:00 p.m. and the August Consumer Price Index (HICP, preliminary reading) and July unemployment rate at 6:00 p.m. The HICP is expected to come in at 3.3% year-over-year, while the core index is forecast at 2.5%.At 10:45 p.m., the revised August U.S. Manufacturing PMI will be released, followed at 11:00 p.m. by the August ISM Manufacturing Index, July JOLTS job openings, and July construction spending.The ISM Manufacturing PMI is expected to decline to 55.2 from the previous reading of 55.6, while JOLTS job openings are projected to decrease to 7.332 million from 7.359 million. We will be watching closely to see how European inflation trends and U.S. manufacturing and labor demand affect the direction of the euro/dollar and dollar/yen exchange rates.