Yen weakness builds as USD/JPY nears key resistance

USD/JPY is pushing back towards a key resistance zone

USD/JPY has been climbing back above 159 and is now approaching 159.50, an area that acted as both support and resistance from mid-April before Japan's intervention at the end of that month. That makes the level important not just technically, but also as a gauge of whether the market is prepared to challenge the same zone again.

If the pair can break convincingly above 159.50, the next upside target looks closer to 160.50, which would take USD/JPY back towards the highs reached before Japanese officials stepped in. The chart setup therefore looks less like a random rebound and more like a test of whether yen weakness is starting to rebuild momentum.

Momentum is firming, but the bigger signal is still the price level

There are signs that momentum is improving alongside the move. The RSI is drifting towards 60, which suggests the pair may still have room to accelerate before becoming technically overstretched. That does not guarantee a breakout, but it does support the idea that bullish pressure is building rather than fading.

For traders, though, the main issue remains the resistance itself. A stronger RSI can reinforce a move higher, but the real signal would come from USD/JPY clearing 159.50 and holding above it. Without that, the pair may still be vulnerable to another pause or reversal near a level that has already attracted policy attention before.

The Bank of Japan may have left the yen exposed for now

One reason the yen remains vulnerable is the timing of the Bank of Japan's next policy decision. The next meeting is not until the week of 15 June, leaving the market with time to keep testing the currency if traders conclude that the BoJ is still unlikely to raise rates immediately.

According to the TradingView analysis, markets are already leaning towards a hike either in June or July, with June odds near 70% and July closer to 80%. Even so, the delay before the meeting gives USD/JPY room to keep moving if investors believe the central bank will wait rather than surprise with a stronger near-term signal.

Oil is another source of pressure on the yen

The yen's weakness is not only about policy expectations. Higher oil prices can also weigh on the Japanese currency, especially if crude starts moving back towards the $100-a-barrel area. Because Japan is a large energy importer, more expensive oil can worsen the country's external balance and increase demand for dollars.

That means traders watching USD/JPY should keep one eye on energy markets too. If oil prices rise again while the BoJ stays cautious, the pair could find another reason to push beyond resistance and place renewed pressure on Japanese policymakers.