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Friday, 7 August 2026

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Dollar Edges Higher as Geopolitical Doubts and Fed Rate Speculation Grip Asian Markets

By Kenji Yamamoto3 min read

Tokyo, 7 August 2026 – The U.S. dollar drifted higher across major trading pairs during Friday’s Asian session, finding fresh momentum as investors reassessed the durability of proposed Middle East peace talks while bracing for pivotal U.S. employment data. The renewed safe-haven appeal of the greenback underscores the delicate balancing act facing Asian market participants, who must navigate both geopolitical uncertainty in crucial energy corridors and shifting expectations surrounding Federal Reserve monetary policy.

In early Tokyo trading, the U.S. currency climbed to 158.505 against the Japanese yen, building on a 0.4% advance from the previous session and putting the pair on course for a weekly gain of roughly 0.7%. This trajectory marks a notable stabilization after a tumultuous week in foreign exchange markets. Days earlier, a concerted intervention effort had knocked the dollar down from a four-decade peak above 163 yen to a 13-week low of 155.20. While historical undervaluation and stretched positioning initially amplified the impact of coordinated currency support, persistent yield differentials have once again begun to reassert upward pressure. Meanwhile, the euro softened slightly against the greenback, exchanging hands near $1.1521.

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Author

  • Kenji Yamamoto is a Senior Fellow at The Ledger Asia, where he explores the critical nexus of Asian international relations, economic development, and environmental sustainability. With extensive experience in cross-border policy analysis, Kenji provides a unique perspective on how diplomatic alliances and green energy transitions drive long-term growth across the Asia-Pacific.

    Previously an advisor for regional development banks, he specializes in sustainable infrastructure and the circular economy’s role in modernizing emerging markets. At The Ledger Asia, Kenji’s deep-dive reports help readers navigate the complex balance between rapid industrialization and the global imperative for climate resilience and corporate responsibility.