Dollar/yen retreated from the lower-160 yen range in early Tokyo trading on Monday, August 31, settling at 159.82/159.84 by 3:00 p.m., compared with 160.04/160.09 in late New York trading on Friday. The move reversed dollar buying sparked by Federal Reserve Chair Warsh’s weekend remarks signaling a proactive approach to containing inflation, as the rise in U.S. interest rates paused. Traders said Warsh’s comments alone were insufficient to push the pair decisively above 160 yen. Expectations for a September Federal Reserve rate increase remain dependent on upcoming economic data, especially employment and inflation figures. Resona Bank market trading desk representative Chiaki Hirokane questioned whether conditions had materially changed from a month earlier, saying Warsh may have sought to provide forward guidance but that the rate decision could not be assessed without the data. Dollar selling by Japanese exporters above 160 yen capped the pair, while the level just above 160 yen reached in late July remains associated with believed Japan-U.S. coordinated intervention. That history has reinforced concern that Japanese authorities may resist further dollar appreciation and yen depreciation. Gaitame.com Research Institute senior FX analyst Takuya Kanda said the economy, including employment, is less robust than several months ago and that uncertainty remains over Warsh’s intentions because he has not yet held sufficient dialogue with markets. Dollar/yen’s failure to extend gains despite escalating tensions in Iran, including new U.S. military strikes, further highlighted intervention caution. Hirokane said authorities were unlikely to intervene immediately solely because the dollar crossed 160 yen and might conserve their resources. Some market participants also expect yen-buying intervention only after a clear break above recent highs. Reaction to U.S. Treasury Secretary Scott Bessent’s remarks was limited, with consensus forming that U.S. economic indicators will determine the pair’s next direction.