USD/JPY Pushes Toward 161.60 as US-Japan Yield Gap Widens

USD/JPY continues its bullish advance, pressing toward the critical 161.60/95 zone that previously triggered Japanese intervention. The pair remains well-supported by a widening US-Japan yield differential, as the Federal Reserve maintains its hawkish stance while the Bank of Japan keeps ultra-accommodative monetary policy largely intact. The divergence in central bank trajectories continues to weigh heavily on the yen, with US Treasury yields holding elevated levels compared to their Japanese counterparts. Traders are closely monitoring the 161.60 to 161.95 range, which represents key intervention levels where the Ministry of Finance previously stepped in to defend the yen. A sustained break above this zone could trigger fresh intervention warnings or actual dollar-selling operations by Japanese authorities. On the downside, support is seen near the 160.00 psychological level. Market participants should exercise heightened caution as proximity to intervention thresholds increases the risk of sudden, sharp reversals. The upcoming US CPI data release could further fuel the move if inflation prints hot, reinforcing expectations for prolonged higher US rates.