The most important development in the market on September 22, 2026, is that the sharp decline in crude oil prices weakened the momentum of U.S. interest rates and the dollar, leading to a drop in the dollar-yen pair.
The dollar-yen pair pulled back by approximately 55 sen from the 157.70 yen level it had briefly touched to 157.15 yen. While the broader trend remains dollar-strong and yen-weak, the momentum for dollar buying has slowed in the short term.
What happened
The confirmed facts are as follows:
• Reports emerged regarding a proposal to reopen the Strait of Hormuz and the restart of Saudi Arabia’s East-West Pipeline.
• Brent crude oil rose to as high as $101.67 before falling below $99.
• USD/JPY pulled back from 157.70 yen to 157.15 yen (confirmed at 21:13 JST on September 22).
• EUR/USD was around 1.1460 (at the same time).
• The U.S. 10-year Treasury yield was in the 4.9% range (Reuters report at 20:12 JST).
• Gold was at $4,327.74, down 0.4% from the previous day (Reuters update at 19:50 JST).
• U.S. stock futures: Dow +0.21%, S&P 500 +0.03%, NASDAQ 100 +0.05% (20:12 JST).
It is important to note that the reopening of the Strait of Hormuz has not been officially decided. It is a proposal at the reporting stage, and crude oil prices could move significantly again depending on the future responses of the U.S. and Iran.
Why lower oil prices pushed down the dollar-yen
The recent price movement can be summarized by the following sequence:
Sharp drop in crude oil → Inflation concerns recede → Upward pressure on U.S. interest rates weakens → Dollar buying retreats → Dollar-yen pulls back
High crude oil prices increase energy costs for businesses and households, acting as a factor that prolongs inflation. If prices remain high, expectations that the Fed will choose additional rate hikes or keep interest rates high for longer tend to strengthen, which pushes up U.S. interest rates and the dollar.
This time, because crude oil plummeted, the reverse unwinding occurred. Reuters also reported the market view that the receding inflation concerns due to lower oil prices weakened the dollar’s advantage in terms of interest rates.
Currency strength
At the time of confirmation, the underlying trend of a strong dollar and weak yen is maintained. However, the short-term driver has shifted from “dollar buying” to “unwinding of dollar buying due to lower oil prices.”
For the dollar-yen, 157 yen is the key immediate level. If it clearly breaks below this, the unwinding of dollar positions could spread, fueled by lower oil prices and lower U.S. interest rates. On the other hand, if crude oil recovers to the $100 range again, it will be easier for the dollar to return to strength through inflation concerns and rising U.S. interest rates.
Three points to watch next
1. Can the dollar-yen maintain the 157 yen level?
2. Will Brent crude recover to $100, or will it head toward $98?
3. Will the U.S. 10-year Treasury yield rise again from the 4.9% range toward 5%?
Gold has recovered to the $4,300 range. While lower U.S. interest rates are a tailwind for gold, its upside could be capped if expectations for additional rate hikes strengthen again due to a rebound in crude oil.
Summary
The key point today is that geopolitical news triggered a chain reaction affecting not only crude oil but also U.S. interest rates, the dollar, and the dollar-yen pair. While the dollar’s momentum is slowing in the short term, the next direction will become clearer depending on whether the 157 yen level or the $100 oil price breaks decisively first.
※ “Confirmed facts” and “market views” are presented separately. Parts regarding future price movements are analysis, not definitive predictions.
Sources
• Reuters: Currency market and dollar pullback due to lower oil prices
• Reuters: Gold market
• Reuters: U.S. stock futures, U.S. interest rates, and crude oil
