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USD/JPY holds near multi-decade highs as Japan cautions on yen move

Weaker-than-expected US CPI has pushed Treasury yields lower and reduced expectations for a July Fed hike, leaving the pair capped near 162.70.

Reported · Written up by our desk · Major Pairs

USD/JPY has been trading near the yen’s weakest levels in nearly 40 years, with Japan increasing cautionary messaging as the pair tests the 162 area. On 3 July, Japan’s Finance Minister Satsuki Katayama said the Ministry of Finance remains in close contact with US authorities on developments in USD/JPY, though no direct intervention was announced, according to Action Forex.

Action Forex also links the dollar pressure on USD/JPY to softer US inflation data. On 14 July, June’s Consumer Price Index came in below forecasts, reducing expectations for a Federal Reserve rate hike at the July meeting and pulling US Treasury yields lower, a mix that may limit the dollar’s ability to push USD/JPY through its recent range.

Technically, the pair peaked near 162.80 on 1 July before reversing sharply to the 160.50 area, where a green support zone is currently located, Action Forex said. After rebounding from the 3 July low, USD/JPY formed a triangle pattern and is now testing the triangle’s upper boundary, with a breakout attempt capped by volume levels around 162.45 and resistance near 162.70.

Action Forex added that bullish volume has not supported the move above the triangle, keeping momentum neutral. The Point of Control is around 162.08, while additional lower levels cited include 161.45 and the 160.50 support zone, suggesting the market could remain range-bound without stronger conviction.

Latest closeUSD/JPY 162.33 ▲0.2%

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