The pair trades at multi-decade highs despite BoJ rate hikes, fueled by Fed rate hike speculation and thin liquidity.
The USD/JPY pair remains near 161.30, its highest level since 2024, as traders ignore the Bank of Japan’s recent rate hike to a 31-year peak. Speculative selling of the yen persists amid bets on further US Federal Reserve tightening in the latter half of the year.
Earlier this week, the BoJ raised rates to 0.25%, yet markets have shown little reaction. Japan’s authorities have signaled readiness to intervene, with Chief Cabinet Secretary Minoru Kihara stating they will act “as needed at any time.” Thin liquidity due to the US Juneteenth holiday may increase volatility.
Technical indicators suggest continued upside momentum, with the Relative Strength Index at 66.46 and the MACD modestly positive. Resistance levels sit at 161.79 and the 40-year high of 161.95.