The yen weakens past 160.79 as Fed officials signal tighter policy, lifting 2-year Treasury yields by 17 basis points.
The USDJPY pair climbed to 160.79, its highest level since 2024, after Federal Reserve officials adopted a more hawkish stance. The shift in tone pushed 2-year Treasury yields up 17 basis points to 4.22%, boosting rate hike expectations for September to 65% from 32% earlier.
The yen’s decline extends beyond the 160.00 mark, a level previously defended by the Bank of Japan and Japanese officials. Futures markets now price in a higher probability of further tightening, contrasting with earlier dovish signals. Technical resistance looms at the 2024 high of 161.92.
Support levels for traders are identified at 160.44, with additional downside risk near the 100- and 200-hour moving averages around 160.25. Sustained moves below these levels could signal a shift in market sentiment.