The Dollar to Yen (USD/JPY) exchange rate pushed above 160 and is currently trading near 160.30, with the yen remaining under pressure despite expectations for further Bank of Japan tightening. Rabobank notes that, unlike other major central banks, there has been limited repricing of Bank of Japan policy expectations since the Middle East.
USD/JPY continues to grind higher despite elevated intervention risk, pressuring both the yen and Japanese bonds given elevated economic and fiscal risks. Markets are pushing for a larger adjustment in yields, otherwise the yen needs to weaken further, leaving Japanese policymakers stuck in a bind where acting on one side risks destabilising the other.
USD/JPY has broken above the 160 handle for the first time since 2024 and this sets up for a volatile Sunday open. Meanwhile, the US Dollar retains breakout potential given the ascending triangle formation and for those looking to fade DXY, EUR/USD is grasping at the 1.1500 level.
The American currency is moving higher amid rising demand for safe-haven assets.
The pair hit a correction towards the target and support of 157.25-65 last week. The market is still holding a trading zone with resistances around 160.20 and 161.95 where each resistance could push for drop a toward the 157.25-65 zone.
USD/JPY is holding near a major ceiling around 160, with 158 acting as support and a break above 160.40 potentially opening a much bigger upside move.
The USDJPY forecast for next week is for the pair to continue being supported by the oil shock situation in the Middle East.
USD/JPY approaches the key 160.00 level with BoJ intervention looming
The Japanese yen continued its downtrend this week, raising the possibility that the Bank of Japan (BoJ) will intervene as it nears a crucial level. The USD/JPY exchange rate was trading at 159.60, a few points below the all-time high of 161.95.
Japanese Yen edges higher on intervention fears; USD/JPY hangs near 159.50 on softer USD
The Japanese yen has been weakening for months, and it's now approaching a price level with a loaded history.
Looking at the 4-hour chart, the pair settled well above 158.80, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair cleared the 76.4% Fib retracement level of the downward move from the 159.65 swing high to the 158.01 low.