USD/JPY has reclaimed the 158.5 area
USD/JPY has moved back above 158.5, a level that had acted as support before the apparent Japanese government intervention on 30 April. The recovery is technically important because it puts the pair back near the range that was in place before that intervention attempt.
The move also raises a broader policy question. If USD/JPY can hold above 158.5, traders may conclude that the earlier intervention has not done enough to produce a lasting recovery in the yen. That could make the reclaimed support zone the main tactical level for the next phase of trading.
For now, the setup is conditional rather than cleanly bullish. The 158.5 area needs to keep acting as support if the rebound is to turn into a more convincing move higher.
The 160 level is back in focus
A sustained hold above 158.5 could encourage traders to test 160 again. That level is important not only because it is a round number, but also because it may show whether Japanese authorities are willing to respond again as yen weakness returns to uncomfortable territory.
If there is no policy response around 160, the source analysis suggests that USD/JPY could try to push through resistance and move back towards the highs seen in July 2024 around 161.5 to 162. That would imply that the market is prepared to challenge the intervention line again.
Still, a move towards those levels may not be straightforward. The closer USD/JPY gets to 160, the more traders may watch for verbal intervention, a shift in BoJ signalling or a sudden change in broader risk appetite.
