USD/JPY Stalls at 158.00 as Japan Signals Potential Intervention

USD/JPY retreated from its recent highs near 158.00 as Japanese officials intensified verbal warnings about potential currency intervention. The pair has pulled back 0.4% (63 pips) from session highs after Finance Ministry officials expressed concern over rapid yen depreciation. The yen's weakness has been driven by the widening interest rate differential between Japan and the US, with the Bank of Japan maintaining ultra-loose policy while the Federal Reserve remains hawkish. Technical indicators show USD/JPY facing strong resistance at the psychologically important 158.00 level, with immediate support at 157.20. Market participants remain cautious about pushing the pair higher, mindful of Japan's history of sudden intervention when the yen weakens too rapidly. Traders are closely monitoring official rhetoric and positioning data for signs of actual intervention, which could trigger sharp yen appreciation and unwinding of carry trades across multiple currency pairs.