USD/JPY Hits 161.98 as Yen Slides to Four-Decade Low Against Dollar

USD/JPY has risen 0.2% to touch 161.98 during New York trading, breaching the previous 161.95 high set in July 2024 and marking the yen's weakest level in four decades against the greenback. The historic slide has rattled Japanese policymakers, who previously intervened aggressively near these levels during the 2024 campaign to shore up the exchange rate. The persistent depreciation is driven by the significant interest rate differential between the US Federal Reserve and the Bank of Japan, with US rates remaining elevated while Japanese monetary policy stays comparatively accommodative. Market participants are closely monitoring upcoming US jobs data, which could influence the Fed's rate hike trajectory and determine whether Tokyo will be compelled to intervene once again. The psychological 162.00 level serves as immediate resistance, while the 161.00 handle represents near-term support. Traders should exercise heightened caution as the risk of sudden BOJ intervention increases sharply at these historically sensitive levels, which could trigger rapid and volatile reversals in USD/JPY.