USD/JPY Surges Past 162 to Reach Highest Levels Since the 1980s

USD/JPY has broken decisively above the 2024 highs near 162, pushing the pair to levels not seen since the 1980s and marking a historic milestone in the dollar-yen exchange rate. The breakout reflects the persistent interest rate differential between the Federal Reserve and the Bank of Japan, with the Fed maintaining elevated rates while the BOJ continues its cautious approach to policy normalization. The widening yield gap between US Treasuries and Japanese government bonds has been a primary driver, attracting capital flows into the dollar and away from the yen. The previous resistance at 162 — the 2024 high — has now been cleared, potentially opening the path toward the 1986 highs near 164-165. Traders should monitor for potential intervention signals from Japanese authorities, as the Ministry of Finance has historically stepped in during periods of rapid yen depreciation. Support is now established at the former resistance near 162, while the psychological 165 level represents the next key upside target. The magnitude of this move increases the risk of sudden volatility from official intervention.