USD/JPY tops 160 to reach 21-month high

USD/JPY climbed above 160 to an intraday high near 160.67 on Thursday, marking a 21-month peak and clearing the prior intervention zone of about 160.23–160.45.

Finance Minister Shunichi Katayama described intervention rhetoric as “stark and forceful” on April 23 and again on April 28, and officials signaled readiness to act around the clock. Traders continued to buy the dollar despite those verbal warnings.

Global crude oil approached $110 a barrel after a roughly 38% rise since April 17. Because Japan relies on imports for most of its crude, higher oil costs increase import bills and inflationary pressure, a factor market participants link to weaker yen moves. Geopolitical tensions affecting Middle East shipping and reports that U.S. military commanders prepared options for the president contributed to oil price gains.

The Bank of Japan left its policy rate at 0.75% at its April 28 meeting, with three officials dissenting in favor of a hike, and maintained guidance for a “gradual interest rate hike.” Short-term interest rate swaps priced roughly a two-thirds probability that the BoJ will raise rates at the June 16 meeting.

Federal Reserve policy documents recorded at least three dissents against an easing bias, and market-implied pricing lifted the U.S.-Japan policy-rate spread for June to about 2.74%, up from about 2.46% three months earlier.

Technically, the pair has risen inside a small ascending channel since an April 17 low of 157.59. Traders identified 159.85 as a key short-term support; an hourly close below that level would point to a near-term reversal toward supports near 159.05 and about 158.60, near the 50-day moving average. Immediate upside resistance sits around 160.74 and 161.16, with a break above 161.16 testing the 161.80–161.95 area where authorities intervened in mid-2024. Hourly momentum indicators, including RSI, have shown higher lows above 50 while the channel has held.

The yen strengthened briefly to about 158.96 in the days after the BoJ meeting, then weakened as oil and rate-driven flows supported dollar demand. Traders are watching oil prices, interest-rate expectations and any official action for signals on the next direction of USD/JPY.

Japanese authorities previously stepped into the market near 160.23–160.45 on April 26, 2024, and intervened again around the 161.80–161.95 area in early July 2024.