USD/JPY tests July 2024 high as rate expectations diverge
USD/JPY is approaching the July 2024 high near 161.75 as markets look past the latest Bank of Japan rate increase and continue to price wide US-Japan rate differentials. A break above that area could keep the dollar-yen uptrend intact, but the risk of renewed Japanese intervention remains the main counterweight.
Founder, Mott Capital Management
The yen remains under pressure after the BoJ hike
USD/JPY has continued to climb even after the Bank of Japan raised interest rates by 25 basis points during the week ending 19 June. That reaction suggests investors are still treating the Japanese yen as vulnerable against the US dollar, despite the latest step towards tighter policy in Japan.
The reason is that markets are not yet pricing a sustained BoJ tightening cycle. According to the TradingView analysis, only about a 70% chance of one additional increase by December is currently priced in. That leaves the yen exposed if traders conclude that Japanese policy will remain comparatively cautious.
US rate expectations are keeping the dollar supported
The US side of the rate story is moving in the opposite direction. The source notes that Fed funds futures are now pricing close to a 90% probability of a Federal Reserve rate hike by the end of 2026, reinforcing the view that US rates could remain relatively attractive.
For USD/JPY, that matters because the pair is highly sensitive to the gap between US and Japanese yields. If investors continue to expect a wider US-Japan rate differential, the dollar may retain support even when the BoJ tightens gradually.
The July 2024 high is the next technical test
The chart now puts the July 2024 high back in focus. The TradingView source identifies the key resistance area near 161.75, with USD/JPY trading close enough to make that level the immediate test for the uptrend.
A sustained break above 161.75 could point to further upside pressure, with the next minor resistance area around 164.50. Beyond that, the source suggests the next major resistance region is much higher, closer to 180, which is why the current test may matter for more than just short-term momentum.
Source: TradingView, 22 June 2026
Intervention risk is the main counterweight
The strongest risk to the upside case is not purely technical. Japanese authorities have already shown a willingness to push back against sharp yen weakness, and a fresh move through the July 2024 high could draw more attention to intervention risk.
The source notes that the last intervention effort only pushed USD/JPY back towards the 155.5 area before the move reversed. That suggests intervention alone may struggle to change the broader trend if rate expectations continue to favour the dollar. A more durable shift would likely require either a stronger BoJ tightening signal, a softer Fed path or a broader change in risk appetite.
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.
USD/JPY may be heading higher if 158.5 support holds
USD/JPY has climbed back above 158.5, a level that had acted as support before Japan's apparent intervention on 30 April. If the pair can hold that area, 160 may come back into focus, while a failure to stay above 158.5 could point to a move back towards 155.50.