The currency pair surpasses post-intervention highs as traders test Japan and US authorities’ resolve amid unclear policy strategies.
USD/JPY climbed 25 pips to 159.55, breaching the post-intervention high of 159.57, marking its highest level this month. The move reflects ongoing pressure on Japan’s Ministry of Finance and the US Treasury as markets probe their tolerance for further yen weakness.
Recent gains follow a period of intervention, with Japan potentially selling US Treasuries and the US using euro reserves to support the yen. Both strategies face limitations, raising questions about long-term sustainability. Analysts cite carry trades and AI-related financing flows as possible drivers of the yen’s decline.
Technical resistance sits at 160, with a break above potentially accelerating upward momentum. Until then, traders are expected to cautiously test higher levels.