USD/JPY breakout puts 1986 levels back in focus
USD/JPY has broken above the July 2024 highs and is now approaching 164.50, putting the pair at levels last seen in late 1986. Weekly momentum still looks constructive, but the deeper the breakout extends, the greater the risk that Japanese authorities sharpen their intervention stance.
Founder, Mott Capital Management
USD/JPY has pushed through the July 2024 highs
USD/JPY has climbed above the highs reached in July 2024 and is now trading near 162.30, according to the TradingView analysis. That breakout matters because it removes a resistance area that had already been associated with heightened intervention sensitivity from Japanese policymakers.
With that ceiling now breached, the next technical level in focus comes in around 164.50. The source notes that this area was last seen in November 1986, which underlines how far the yen has already weakened against the dollar.
The weekly chart still points to bullish momentum
The weekly chart remains the clearest way to read the move. The prior resistance zone around 161.95 has given way, while the relative strength index is running near 65.40 and still below the conventional overbought threshold of 70.
That combination suggests momentum remains firm without yet looking exhausted. In other words, the breakout is not only about price clearing an old high - the supporting momentum picture still leaves room for the move to extend.
Longer-term chart patterns imply the move could be bigger still
The source also highlights two longer-term technical structures on the weekly chart: an ascending triangle and an inverse head-and-shoulders pattern. Taken together, those formations suggest the latest move may be part of a broader breakout rather than a brief overshoot above resistance.
If that interpretation holds, the longer-run upside targets become much more ambitious. TradingView notes that such a breakout could eventually leave levels like 180 or even 200 in play, which would imply a materially weaker yen over time.
USD/JPY, weekly. Sources: TradingView, Michael Kramer.
Intervention risk remains the main counterweight
The bullish technical picture is colliding with a familiar policy risk. The higher USD/JPY trades, the more likely it is that Japanese officials become uncomfortable with the speed or scale of yen weakness, especially now that the pair is revisiting levels not seen for nearly four decades.
That does not automatically invalidate the breakout, but it does raise the probability of stronger verbal warnings or direct market action if the move accelerates. For now, the chart says the trend is still higher, while intervention risk remains the main reason traders may hesitate to chase the move aggressively.
USD/JPY tests July 2024 high as rate expectations diverge
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The yen faces a defining week as the BoJ decision nears
The Bank of Japan's policy decision on 16 June could define the yen's next move, with markets pricing more than a 90% chance of a rate rise to 1% and USD/JPY already trading above 160. The chart still leaves room for more upside in the pair, but lower oil prices and any hawkish surprise from the BoJ could yet give the yen some support.
Yen weakness builds as USD/JPY nears key resistance
USD/JPY is pushing back towards 159.50, a level that acted as support and resistance before Japan's late-April intervention. If that barrier gives way, the pair could retest 160.50, while the Bank of Japan's delayed policy meeting and still-elevated oil prices continue to leave the yen exposed.