Traders price in potential Japanese government action after the pair retreats from 40-year highs near 162.40 in Asian trading.
USD/JPY declined to 162.40 during Thursday’s Asian session, extending losses after peaking at multi-decade highs. The yen’s strength reflects growing speculation of stealth intervention by Japanese authorities to curb excessive weakness in the currency.
The pair had earlier climbed to levels last seen in 1986, prompting market participants to reassess risks of official action. No direct intervention has been confirmed, but trader caution intensified as the yen found support near current levels.
Market focus remains on Japan’s policy response, with further downside potential for USD/JPY if intervention risks persist.