USD/JPY

With the Fed expected to hold rates elevated and the BoJ still far from aggressive tightening, the structural carry trade in favour of the USD remains intact — Tokyo's verbal intervention has failed to break the trend, and 164–165 is wide open.

USDJPY is trading at a fresh 40-year high near 163.85, sustaining a breakout above the key 162.83 consolidation ceiling as US-Japan rate differentials remain wide and BoJ intervention warnings lack specific triggers.

Main Risk

Bank of Japan surprise rate hike or coordinated FX intervention

A unilateral BoJ currency intervention above 164.00 — as seen in May–October 2024 when authorities sold over $60bn — could trigger a rapid 300–500 pip reversal, the pair's primary structural tail risk.