Japanese Yen retreats from highs, trends toward 161.00

USD/JPY trades down to161.10 as traders stay cautious near the four-decade high around 162.00.
Intervention risks remain elevated with Japanese authorities closely monitoring currency moves.
US PCE is the next key catalyst as a stronger inflation print could support the Fed’s restrictive stance, while softer data may trigger profit-taking.

Agustin Wazne FXStreet

The USD/JPY pair sank as low as 161.07 on Monday, retreating from highs near 161.90 as traders remain alert to possible Japanese intervention after the pair moved close to a four-decade high.

Japanese officials have repeatedly warned that they are closely monitoring currency markets, and the latest move comes after USD/JPY posted its highest weekly close in about 40 years.

For now, USD/JPY remains supported by the Greenback’s yield advantage, but the closer the pair gets to 162.00, the greater the risk of verbal or direct intervention from Tokyo. That could leave the pair vulnerable to sharp pullbacks even if the broader trend remains tilted to the upside.

Attention also turns to the upcoming US Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred inflation gauge. A stronger-than-expected PCE reading on Thursday could reinforce expectations that the Fed will keep policy restrictive for longer, while a softer print may give traders a reason to take profit after the pair’s strong rally.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 161.35, maintaining a constructive bullish bias as it holds above the 20-period Simple Moving Average (SMA) at 161.12 and the 100-period SMA at 160.27. The pair also stays above horizontal support at 161.16, while the Relative Strength Index (RSI) eases back toward the mid-60s area around 59, suggesting bullish momentum is moderating rather than reversing after recent overbought readings.

On the topside, initial resistance is seen at 161.58, followed by 161.77, and then the recent horizontal cap near 161.92. On the downside, a break below the nearby 161.16 support would expose the 20-period SMA at 161.12, with the deeper 100-period SMA underpinning the broader uptrend around 160.27.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

GBP/USD remains in two-day highs around 1.3260

GBP/USD adds to Friday’s bounce, gathering fresh traction and flirting with the 1.3270 zone on Monday, or two-day tops. Cable’s decent advance comes despite the move higher in the Greenback and investors’ assessing of UK PM K. Starmer's resignation.

EUR/USD remains close to three-month lows near 1.1450

EUR/USD sets aside Friday’s bounce and trades with modest losses in the mid-1.1400s at the beginning of the week. The continuation of the bid bias in the US Dollar continues to weigh on spot despite improving sentiment from the geopolitical front.

Gold bounces off lows, looks to surpass $4,200

Gold regains composure and leaves behind three-consecutive daily declines on Monday, looking to regain the area above the $4,200 mark per troy ounce. Reports of progress in the latest round of US-Iran talks are helping the precious metal maintain its footing at the start of the week, although the stronger Greenback seems to limit the upside potential for now.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

Is Shiba Inu dead or just in a crisis? The data behind SHIB's 95% crash

SHIB, the dog-themed meme coin that became one of the biggest success stories in crypto and turned early buyers into crypto millionaires, is facing tough times. Its price has fallen more than 32% so far this year, and it is down 95% from its all-time high in 2021. Is SHIB simply another fading meme coin, or is the market overlooking a possible recovery story?

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.