Overview
- USD/JPY has pushed back above 159 and is probing the 160 mark, signalling that the coordinated late‑July intervention that briefly cut the pair to about 155 is no longer holding full sway.
- The joint US‑Japan operation in late July temporarily forced the yen up from near 164 to about 155 but markets have steadily reversed that move, testing how far authorities will go to defend the currency.
- Structural forces are still working against the yen because a wide interest‑rate gap between US and Japan and profitable carry trades encourage investors to borrow yen to buy higher‑yielding US assets.
- Traders are watching rising US Treasury yields, shifting Fed rate odds, and tensions in the Middle East for signals that will keep dollar support strong and add to FX volatility.
- Analysts disagree on the outlook and policy path, and commentators warn that more extreme steps such as selling US Treasuries to back the yen would raise global market volatility and political risk.