USD/JPY slid by more than 1% in early US trading on Wednesday after touching 160.39, its highest level in almost five weeks, and again failing to hold above the psychological 160 mark. The yen’s sudden strength fuelled speculation of renewed Japanese intervention, following repeated tests of 160, while the prior episode began from around 164. The move comes alongside a more hawkish tone from Bank of Japan officials, who have urged rapid action to support a weakening yen as inflationary risks rise, reinforcing expectations of a rate increase as early as this month.
Technical Analysis and Key Levels
The pair dropped to 158.20 before rebounding above 158.42, a level tied to the 38.2% Fibonacci retracement of the 155.22–160.39 rally and the 200-day moving average. Daily chart conditions have softened, with the RSI slipping below 50 and 14-day momentum turning negative; a sustained break of 158.42 would point to further downside, while any recovery is seen capped below 159.17, which aligns with the 23.6% Fibonacci level and the 20-day moving average. Resistance is seen at 159.17, 159.35, 159.59 and 160.00, while support sits at 158.42, 158.05, 157.81 and 157.20.
