Japan’s Yen Slides to a Four-Decade Low as Authorities Refrain from Intervention Despite Firm Warnings

The Japanese yen remains under pressure against the U.S. dollar, with the greenback continuing to draw support from rising expectations of further Federal Reserve rate hikes. Meanwhile, the absence of tangible intervention measures from Japanese authorities—despite persistent warnings—has continued to weigh on the yen.

A break above the June 2024 high at 161.95 propelled USD/JPY beyond the 162.00 threshold, opening the door for a potential advance toward 163.00 and higher should Japanese policymakers continue to refrain from direct market action.

Nonetheless, intervention risks remain elevated. Officials have repeatedly signaled their readiness to step into the market if exchange-rate moves become excessively volatile, although they remain mindful of the policy divergence between the Fed and the Bank of Japan, which continues to favor the U.S. dollar, as well as the more dovish tone recently adopted by policymakers.

Initial support is seen at 161.85, followed by the rising 10-day moving average at 161.58 and the ascending 20-day moving average at 160.90.

Res: 162.90; 163.57; 164.24; 164.50
Sup: 161.95; 161.21; 160.65; 160.00