USD/JPY trades above 160 despite mounting intervention speculation

USD/JPY remains firmly supported above the 160 level for a third consecutive session, shrugging off repeated warnings from Japanese officials about the possibility of currency market intervention.

The pair continues to draw support from growing expectations that the Federal Reserve could resume tightening later this year, underpinning the U.S. dollar and keeping USD/JPY on course for another test of the 2026 high at 160.72—the level that triggered official intervention in late April.

Market participants are now focused on Wednesday’s U.S. CPI report. Inflation is expected to accelerate further in May, with the annual rate forecast to rise to 4.2% from 3.8% in April. A stronger inflation reading could reinforce pressure on the Federal Reserve to maintain a hawkish stance, although policymakers are still widely expected to leave interest rates unchanged at next week’s meeting under Chairman Kevin Warsh.

From a technical perspective, the daily chart remains constructive, although overbought conditions suggest that bullish momentum may be approaching a pause. The 160 level should provide initial support, while the daily Tenkan-sen at 159.74 is expected to underpin the pair and help preserve the broader bullish structure.

That said, caution is warranted. The daily Ichimoku cloud continues to narrow and is projected to form a bearish twist on Friday, a development that could increase the risk of a deeper corrective pullback if upside momentum begins to fade.

Res: 160.45; 160.72; 161.00; 161.95
Sup: 160.00; 159.74; 159.30; 159.00