Dollar Retreats to 157.79 From 159.00 High as Yields Fall and Tokyo Guards 160 — Range Holds Into Fed and BoJ

The dollar is giving back ground against the yen for a second day. USD/JPY traded at 157.789 on Thursday, down 0.34% from the previous session, after printing a session range of 157.58 to 158.33. The pair opened near 158.30 against a previous close of 158.29-158.32 and slid during the Asian session to 157.60, a one-week low.

The move started Wednesday. USD/JPY spiked to the 159.00 area after the hot US inflation report, a three-week high, then reversed lower once the initial dollar reaction faded. On the four-hour chart, the pair reached resistance at 158.91 before a corrective decline began. From 159.00 to 157.79, the dollar has lost 0.76% in roughly 24 hours.

The level matters because of what sits above it. Japan’s Ministry of Finance characterizes yen weakness toward 160 as market disorder. Late July brought a joint US-Japan intervention when USD/JPY approached that zone. At 157.79, the pair sits 2.21 yen, or 1.4%, below the 160 line that triggered the last operation.

The 52-week range frames the risk. USD/JPY has traded between 149.37 and 163.99 over the past year. At 157.79, the pair sits 3.8% below the high and 5.6% above the low. Over 12 months, the dollar is up 4.2% to 5.0% against the yen depending on the reference point.

The moving averages define the battleground. The 50-day average sits at 157.71, just below the current price. The 200-day moving average sits near 158.50, and the pair has traded just below it for most of October. Thursday’s slide put USD/JPY back below the four-hour 100-period simple moving average, a short-term bearish signal.

The crosses tell a different story from the dollar pair. EUR/JPY rose 0.16% to 176.905, GBP/JPY gained 0.12% to 209.136 and CHF/JPY climbed 0.36% to 190.304. AUD/JPY fell 1.33% to 108.918 after disappointing Australian employment figures. The yen is firming against the dollar, but not broadly against other majors.

That split is the core of the forecast. Thursday’s yen gain is a dollar story driven by US Treasury yields, not a yen-strength story driven by Japan. USD/JPY sits inside a box: the threat of intervention caps it near 159-160, while the wide rate gap and an expected October Bank of Japan pause put a floor under it. Breaking out in either direction needs the Fed, the Ministry of Finance or the BoJ to move first.

The Dollar Side: Hot CPI Spike, Then a Yield-Driven Fade

US data triggered the round trip. September consumer prices rose 3.7% annually against a 3.6% forecast, with core at 2.6% against 2.5%, up from 3.4% and 2.4% in August. USD/JPY jumped toward 159.00 on the release.

The dollar lost momentum quickly. The initial reaction faded as markets weighed the odds of an October Fed move. Treasury yields fell and dollar profit-taking set in, combining with intervention risk to support the yen.

Thursday’s producer data didn’t change the direction. The September Producer Price Index rose 1.3% for the month and 6.3% over 12 months, the largest monthly gain since March 2022. Forecasts called for 0.6% and 5.5%. Core producer prices rose 0.5% for the month and 5.0% over 12 months. In a normal regime, that would push yields and the dollar higher. Instead, Treasuries rallied.

The 10-year yield fell 14 basis points to 5.05%, from 5.19% before the US open. Both the 10-year and 30-year yields fell more than 13 basis points, putting the 30-year on track for its biggest drop since November 25, 2024. The 10-year touched 5.36% on October 7, its highest since 2002.

Equity stress explains the bond rally. The Nasdaq fell 1.05% to 26,411.88 after a 1.9% drop Wednesday. Chip stocks fell for an eighth straight session, and CoreWeave dropped 7.34% to $60.96, a new 52-week low, as its unsecured bonds yielded more than 16%. Investors fled AI risk for Treasuries, which pulled yields lower and weakened the dollar.

USD/JPY is the most yield-sensitive major pair. The yen’s direction against the dollar tracks the gap between US and Japanese yields more closely than any other currency. A 14-basis-point drop in the US 10-year narrows that gap and pulls USD/JPY lower almost mechanically. If US yields keep falling, the pair could extend toward 157.00 or 156.70, while a recovery in yields would likely trigger a rebound.

The dollar index confirms the broad retreat. It hit an 18-month high on Wednesday before fading to 101.74 after the CPI release. The dollar weakened against the euro, sterling, the franc and the yen during Thursday’s European session.

Friday is the next test. Fed Chair Kevin Warsh speaks, the last major policy signal before the Fed’s pre-meeting quiet period. A hawkish tone would likely send USD/JPY back toward 158.91.

Fed Math: October Hike Odds and the 275-Basis-Point Gap

The Federal Reserve sets the top side of the box. Before Wednesday’s CPI, futures priced a 22.1% chance of a 25-basis-point hike at the October 27-28 FOMC meeting. After the release, odds jumped above 49% before settling below 45%, with December hike odds at 89.7%. Other readings put October hike odds near 40% or less.

The Fed has already tightened. It raised its target range by 25 basis points to 3.75%-4.00% in September, its first increase since 2023. An October hike would lift the upper bound to 4.25%.

The rate gap with Japan is enormous. With the Fed’s range at 3.75%-4.00% and the Bank of Japan’s policy rate at 1.25%, the gap stands at 250 to 275 basis points. An investor borrowing yen at Japanese rates and holding dollar deposits earns that spread, which keeps demand for dollars steady and the yen weak.

That gap explains the 2026 puzzle. The Bank of Japan has raised rates twice this year, and the yen has weakened after both moves. The Fed has raised rates too, keeping the spread wide. As long as the gap stays above 250 basis points, carry traders have little reason to unwind.

An October Fed hike would widen the gap. If the Fed raises rates on October 28 and the Bank of Japan holds on October 30, the gap would widen to 275 to 300 basis points. That would likely push USD/JPY back toward 159.00 and test the Ministry of Finance’s tolerance near 160.

A Fed hold would narrow the gap only in expectation. If the Fed holds in October and the Bank of Japan hikes in December as expected, the gap would narrow to 225 to 250 basis points by year-end. That path supports a gradual yen recovery toward 156.

Politics complicate the Fed. The November 3 midterms fall one week after the meeting, and White House officials have urged the Fed to wait for October data. A Fed seen as deferring to political pressure would weaken the dollar’s policy credibility, which would favor the yen.

The sequencing matters. The Fed decides on October 28, two days before the Bank of Japan on October 30. Markets will price the BoJ outcome partly off the Fed decision, and any Fed hike would raise pressure on Tokyo to respond.

Bank of Japan at 1.25%: A 31-Year High That Didn’t Help the Yen

The Bank of Japan has been hiking at its fastest pace in decades. The policy board raised the policy rate to 1.25% on September 18, the highest since 1995, the second hike in three months and the fastest tightening cycle since 1990. Governor Kazuo Ueda said the bank had entered a new policy phase, shifting focus from pushing inflation toward 2% to preventing it from overshooting.

The yen weakened anyway. Before the September 18 hike, USD/JPY traded near 155.8. After the decision, the pair climbed steadily, reaching 158.387 on news of a likely October pause and hovering near 158 since. At 157.79, the dollar is still 1.3% stronger against the yen than before the hike.

The October meeting looks like a pause. Bank of Japan officials are leaning toward holding rates steady at the October 30 meeting, avoiding a rare second consecutive monthly hike. Interest-rate pricing shows traders assign only a 10% probability to an October hike, while the odds of action by December have climbed to 88%.

Ueda’s message has stayed consistent. In an October 6 speech, he said the bank intends to continue raising its policy rate and adjusting monetary accommodation in response to economic activity, prices and financial conditions. He gave little indication he intended to challenge bets against an October hike. He also said underlying inflation is already very close to the 2% target, with the focus on keeping prices stable at that level.

The board is split on pace. Minutes of the July meeting showed members leaning toward further tightening, with some arguing the bank should guard against inflation overshooting. But the summary of opinions from September, published October 1, included a view that there was no need to rush.

The neutral-rate timeline suggests more hikes. The Bank of Japan’s July report put the point of reaching a neutral rate between October 2026 and March 2028, which leaves room for a faster pace if inflation surprises.

A surprise October hike would be the biggest catalyst. With markets pricing just 10% odds, a move on October 30 would trigger a sharp yen rally, likely pushing USD/JPY toward 155-156 within days. A hold, as expected, would leave the pair dependent on the Fed and US yields.

Intervention: The 160 Line and $96 Billion of Yen Buying

The Ministry of Finance is the most powerful force capping USD/JPY. Japan’s hawkish rhetoric is keeping the pair from rising above 159.00, and the threat of intervention caps gains near the 160.00 red line. Each time the pair approaches that zone, officials step up verbal warnings.

The last intervention was large. In late July, a joint US-Japan intervention followed USD/JPY’s surge toward 160. The Ministry of Finance disclosed $96 billion of yen-buying intervention across July and August. The yen moved to 155 from 164 after the operations, and Japan’s line at 160 held.

The US joined the effort. The US operation was much smaller than Japan’s, but American participation marked an unusual show of support. Joint action signals coordination between Washington and Tokyo, which raises the credibility of any future intervention threat.

The effect faded quickly. Within weeks of the intervention, the yen moved back toward 158. Intervention can reverse a move but can’t change the underlying rate gap that drives the trend. That is why the pair keeps returning to the 158 area after each operation.

Thursday’s position puts intervention risk in focus. At 157.79, USD/JPY sits 2.21 yen from 160 and 1.21 yen from Wednesday’s 159.00 high. The Ministry of Finance doesn’t publish a fixed trigger level, but the pattern of past operations points to the 159.50-160.00 zone as the area where action becomes likely.

Intervention risk works as a ceiling and a magnet. Traders sell USD/JPY rallies toward 159 to avoid being caught by a sudden yen surge. That selling caps the pair below 159 even before any official action. At the same time, the pair’s steady drift back toward 158 after each intervention shows that the ceiling doesn’t reverse the trend.

The scale of reserves supports credibility. Japan holds more than $1 trillion in foreign reserves, giving the Ministry of Finance ample firepower for repeated operations. After spending $96 billion in July and August, Japan retains the capacity to act again.

For the forecast, intervention sets the upper boundary. A move above 159.50 would likely trigger renewed warnings, and a test of 160 would raise the probability of another operation sharply.

Japan’s Economy: Inflation, Tax Cuts and a 30-Year JGB High

Japanese domestic conditions support further Bank of Japan tightening. Ueda said underlying inflation is very close to the 2% target. Wage momentum has stayed strong, with several labor unions setting pay goals above 5% in recent rounds.

Bond yields are rising. The 10-year Japanese government bond yield reached a 30-year high earlier this year, which Ueda attributed to the global rise in rates. Higher JGB yields narrow the gap with US Treasuries at the long end, which over time supports the yen.

The Bank of Japan’s bond holdings complicate that. The central bank owns half of Japanese government bonds, keeping rates lower than they would otherwise be. US long-term rates have moved higher in 2026, so the long-end spread remains wide even as JGB yields rise.

Fiscal policy adds pressure. The Takaichi administration called for cuts in the consumption tax on food. Tax cuts without offsetting revenue raise concerns about Japan’s fiscal path, which can weaken the currency by increasing the risk premium on Japanese assets.

Energy is a major channel. Japan imports almost all its oil and gas. Brent fell 1.97% to $103.97 Thursday after a US official said the administration was weighing easing sanctions on Russian shadow-fleet tankers. Lower oil prices reduce Japan’s import bill, improve its trade balance and support the yen. Crude oil easing on sanctions-relief discussions contributed to the yen’s gains Thursday.

Brent is still up 66% from a year earlier. Japan’s trade balance has deteriorated as energy prices surged with the Iran war, adding to yen weakness throughout 2026. A sustained drop in oil below $95 would be one of the strongest structural supports for the yen.

Equities add a risk-off layer. Japan’s Nikkei 225 fell 5% on Thursday, with Kioxia and SoftBank Group among the biggest losers in the Asian chip rout. Domestic equity losses typically trigger repatriation by Japanese investors, which supports the yen. But foreign investors selling Japanese stocks can also sell yen, offsetting that effect.

For the forecast, Japanese fundamentals point toward a stronger yen over months, not days. Wage growth, rising JGB yields and the Bank of Japan’s tightening bias all support the currency. The fiscal path and the persistent rate gap with the US keep that support from translating into near-term gains.

The Carry Trade: Why the Yen Stays Soft

The carry trade is the structural force behind yen weakness. The yen remains the most undervalued G10 currency by a wide margin, yet strong interest in the carry trade and strong direct investment trends keep it soft.

The math is simple. Borrowing yen at 1.25% and investing in US dollar assets yielding 3.75%-4.00% at the short end, or 5.05% on 10-year Treasuries, earns a spread of 250 to 380 basis points. As long as USD/JPY stays stable or rises, carry traders earn that spread plus any currency gain. Only a sharp yen rally, from intervention or a policy shift, threatens the trade.

That explains why Bank of Japan hikes haven’t helped. Each 25-basis-point BoJ hike trims the spread modestly, but if the Fed hikes by the same amount, the spread stays unchanged. The BoJ’s two hikes in three months were matched by the Fed’s September increase, leaving the carry intact.

Japan’s role as a creditor amplifies the effect. Japanese investors hold large positions in US Treasuries, and Japan’s grip on US Treasuries means currency moves aren’t only Tokyo’s problem. Life insurers, pension funds and retail investors send capital abroad seeking higher yields, which creates steady yen selling.

Volatility threatens the trade. Carry trades depend on stable currencies. When volatility spikes, as it did around the July intervention, carry traders rush to unwind, which triggers sharp yen rallies. The risk of another intervention or a surprise BoJ hike keeps carry traders cautious near 159-160.

Thursday’s risk-off backdrop matters. Global equity stress, including the Kospi’s 7.57% plunge and the Nikkei’s 5% drop, typically pushes investors to reduce leverage. Yen-funded carry positions are often among the first to be cut, which supports the yen during market stress. The yen’s gain Thursday partly reflects that dynamic.

The crosses show the limits. EUR/JPY and GBP/JPY rose Thursday, which means carry trades funded in yen against the euro and sterling remained intact. Only AUD/JPY fell sharply, and that move came from weak Australian jobs data rather than broad carry unwinding.

For the forecast, the carry trade keeps a floor under USD/JPY. As long as the rate gap stays above 250 basis points, any yen rally is likely to be sold by carry traders reloading positions.

Risk Sentiment: Kospi -7.6%, Nikkei -5% and the Haven Question

Global markets were in risk-off mode Thursday. South Korea’s Kospi fell 7.57% overnight, with SK Hynix down 11% and Samsung down 9%. Japan’s Nikkei 225 dropped 5%. Taiwan’s weighted index lost 3.41%. In New York, the S&P 500 traded at 7,686.53, down 0.42%, and the Nasdaq at 26,411.88, down 1.05%.

The yen’s haven role is weaker than it used to be. Historically, the yen strengthened sharply during global stress as Japanese investors repatriated capital. In 2026, the persistent rate gap and carry positions have dulled that response. The yen rose Thursday, but its 0.34% gain against the dollar was modest compared with the scale of the Asian equity rout.

Other havens moved more. Gold futures rose 1.79% to $4,181.30. The Swiss franc gained 0.59% against the dollar, outperforming the yen. CHF/JPY rose 0.36%, showing that investors seeking safety in Europe chose the franc over the yen.

The AI selloff is the source of stress. The Philadelphia semiconductor index fell 4.3% Wednesday and chip stocks dropped for an eighth straight session Thursday. CoreWeave’s bonds yielded more than 16%, and Bitcoin miners turned AI hosts fell more than 12% Wednesday. Japan’s exposure comes through SoftBank and Kioxia, both major players in AI infrastructure and memory chips.

The stress originated in US assets, which helped the yen against the dollar specifically. When US equities and credit sell off, Treasuries rally and the US yield advantage narrows, which weakens USD/JPY. When stress originates elsewhere, the dollar tends to strengthen as a global funding currency.

Crypto offered no safe haven. Bitcoin fell 2.38% to $80,284.33, and crypto liquidations reached $973 million in 24 hours. Investors cut risk across speculative assets, moving into Treasuries and gold.

For the forecast, risk sentiment is a modest yen positive. If the AI selloff deepens and US yields keep falling, USD/JPY could slide toward 156.70. If Asian markets stabilize Friday and US yields recover, the pair would likely rebound toward 158.50.

Yields and the Spread: The Real Driver of USD/JPY

The yield spread between the US and Japan is the single best predictor of USD/JPY. The US 10-year yield stood at 5.05% Thursday, down from 5.36% on October 7. The US two-year yield stood at 4.79% on October 7. Japanese yields have risen but remain far below US levels.

The direction of the spread matters more than its level. A narrowing spread, either through falling US yields or rising Japanese yields, pulls USD/JPY lower. A widening spread pushes it higher. Thursday’s 14-basis-point drop in US 10-year yields narrowed the spread and explains most of the pair’s decline.

Real yields reinforce the gap. The US 10-year real yield stood at 2.92% on October 8, with 10-year breakeven inflation at 2.35%. Japanese real yields remain near zero or negative given the Bank of Japan’s large bond holdings and inflation near 2%. That real-yield gap of close to 3 percentage points keeps capital flowing from Japan to the US.

The term premium in the US is elevated. The 10-year Treasury term premium reached its highest level in more than a decade earlier this month. A high term premium keeps long-term US yields elevated even if the Fed stops hiking, which supports USD/JPY over time.

Short-term rates matter for carry. Carry traders focus on the short end, where the Fed’s 3.75%-4.00% range and the Bank of Japan’s 1.25% set the spread. Thursday’s long-end rally doesn’t change the short-end gap, which is why carry positions stayed intact.

The break-even for intervention is clear. Japanese authorities intervene when the yen weakens faster than the yield spread justifies. When the spread is stable and USD/JPY rises sharply, as in July, the Ministry of Finance sees speculation rather than fundamentals and steps in.

For the forecast, the yield spread sets the floor. With a 250-to-275-basis-point policy gap and a real-yield gap near 3 percentage points, USD/JPY has fundamental support in the 155-157 area. Only a sustained narrowing of the spread, through a Fed pause and further BoJ hikes, would push the pair below that range.

The Crosses: EUR/JPY, GBP/JPY and AUD/JPY

The yen’s crosses reveal where the pressure comes from. EUR/JPY rose 0.16% to 176.905 Thursday, while GBP/JPY gained 0.12% to 209.136. Both crosses rose because the euro and sterling outperformed the dollar more than the yen did. EUR/USD gained 0.5% to 1.1217, and GBP/USD rose 0.69% to 1.3270.

The yen’s weakness against European currencies is notable. Over the past year, EUR/JPY is up 0.62% and GBP/JPY up 3.49%. Despite eurozone and UK economic challenges, the yen has failed to gain ground against them. That reflects the rate gap: the ECB’s 2.50% deposit rate and the Bank of England’s 3.75% Bank Rate both sit above the Bank of Japan’s 1.25%.

AUD/JPY tells a different story. The pair fell 1.33% to 108.918 Thursday after disappointing Australian employment figures weighed on the Australian dollar. Over 12 months, AUD/JPY is still up 11.66%, one of the strongest yen crosses. A sharp one-day drop in a carry-favored pair shows how quickly positions unwind when data disappoints.

CHF/JPY rose 0.36% to 190.304. The franc’s outperformance against the yen shows that European investors seeking a haven preferred the franc. Over 12 months, CHF/JPY is up just 0.31%, the smallest gain among the major crosses.

The crosses matter for USD/JPY in two ways. First, they show the yen’s weakness is broad, not just a dollar story. Second, they indicate where carry trades are concentrated. Any broad yen rally would show up across all crosses, not just against the dollar. Thursday’s mixed cross performance confirms that the yen’s gain was dollar-specific.

The Asian crosses also moved. CNY/JPY fell 0.18% to 23.601, and KRW/JPY dropped 0.57% to 0.1174 as the won weakened on the Kospi rout. Over 12 months, CNY/JPY is up 11.79% and KRW/JPY 10.51%, showing that even Asian currencies have gained against the yen.

For the forecast, the crosses confirm the yen’s structural weakness. A durable yen recovery would need gains across all crosses, which would require either a hawkish BoJ surprise or broad carry unwinding.

Technical Map: 157.58 Floor, 158.91 Ceiling, 160 Red Line

The chart has a well-defined range. Support starts at Thursday’s session low of 157.58, near the Asian-session one-week low of 157.60. The 50-day average at 157.71 sits just above it. Below that, 157.00 and 156.70 form the next support levels if US yields keep falling. The pre-hike level of 155.8 from September is the deeper reference.

Resistance is layered above. The first ceiling is Thursday’s high at 158.33, followed by the 200-day moving average near 158.50. The four-hour resistance at 158.91 and Wednesday’s 159.00 high form the next barrier. Above that, 159.50-160.00 is the intervention zone where Japanese authorities are most likely to act.

The four-hour chart shows short-term weakness. USD/JPY broke below the 100-period simple moving average on the four-hour chart, a short-term bearish signal. The pair also formed a hammer reversal pattern near the lower Bollinger Band on the four-hour chart around 158.00 earlier, suggesting buyers are active at the bottom of the range.

The daily structure remains an uptrend. The pair has made higher lows since the pre-hike 155.8 level in September, with the post-intervention low near 155 in August as the base. The 52-week range of 149.37-163.99 shows the broader uptrend from last year’s lows.

Momentum is mixed. The rejection at 159.00 and the break below the four-hour 100-period average favor a short-term pullback. The hold above the 50-day average and the rate-gap support favor buyers on dips.

The daily close sets the bias. A close below 157.58 would confirm the pullback and target 157.00 and 156.70. A close above 158.50, the 200-day moving average, would signal that buyers have regained control and target 158.91-159.00.

Friday’s Warsh speech and the Asian session will likely set direction. A hawkish Fed tone would push the pair back toward 158.50. A dovish signal or further US yield declines would extend the slide toward 157.00.

Scenarios Into October 28-30: 156.70 Downside, 159.50 Upside

The base case is a range bounded by policy. If Warsh keeps October open without committing, US yields stabilize near 5.05% and the Bank of Japan holds on October 30 as expected, USD/JPY trades between 157.00 and 159.00 into the Fed decision. Rallies toward 159 meet intervention warnings and sellers, while dips toward 157 attract carry traders. The pair likely ends October between 157.50 and 158.50.

The bullish case for the dollar needs a hawkish Fed. If Warsh signals that October is live, US yields rebound above 5.20% and the Fed hikes on October 28, USD/JPY breaks 159.00 and tests 159.50, a 1.1% gain from current levels. A move above 159.50 would likely trigger Ministry of Finance warnings, and a test of 160 would raise the probability of another intervention sharply. That caps realistic upside near 159.50-160.00.

The bearish case for the dollar needs a Fed pause, falling yields or a BoJ surprise. If Warsh signals patience, US 10-year yields fall below 5.00% and the AI selloff deepens, USD/JPY breaks 157.58 and targets 157.00, then 156.70, a 0.7% decline. A surprise Bank of Japan hike on October 30 would push the pair toward 155-156 quickly. Combined with a Fed hold, it could test the post-intervention low near 155.

The probabilities favor the base case. The intervention ceiling near 160 and the rate-gap floor near 157 have defined the market for weeks. Both central banks are likely to follow market expectations: a coin-flip Fed and a near-certain BoJ hold. That leaves the pair range-bound, with the US 10-year yield setting the direction inside the range.

Three triggers will decide the path. First, Warsh’s tone on Friday. Second, the US 10-year yield, where a move below 5.00% would push the pair toward 156.70. Third, Ministry of Finance rhetoric, where any escalation near 159 would cap the upside.

Verdict: Range-Bound, 157.58 and 159.00 Define the Box

USD/JPY’s slide to 157.79 is a US yield story, not a yen recovery. The pair reversed from a three-week high near 159.00 after the hot US CPI and fell to a one-week low of 157.58 Thursday as the US 10-year Treasury yield dropped 14 basis points to 5.05%. The yen gained against the dollar but rose only modestly against the euro and sterling, confirming that the move was dollar-driven.

The structural setup still favors the dollar. The Fed’s 3.75%-4.00% range leaves a 250-to-275-basis-point gap with the Bank of Japan’s 1.25% policy rate, and October Fed hike odds jumped from 22.1% to as high as 49% after the CPI print. The Bank of Japan raised rates to a 31-year high in September, its fastest tightening since 1990, yet the yen weakened from 155.8 to 158 afterward. Markets assign only a 10% chance to an October BoJ hike, with 88% odds by December.

The ceiling is firm. Japan spent $96 billion on yen-buying intervention in July and August alongside unusual US support, defending the 160 line. Hawkish rhetoric from Tokyo keeps USD/JPY from rising above 159.00, and traders sell rallies to avoid getting caught by another operation.

The forecast is range-bound. Expect USD/JPY to trade between 157.00 and 159.00 into the October 28 Fed and October 30 Bank of Japan decisions, with a daily close below 157.58 opening a path to 156.70 and a close above 158.50 targeting 159.00. A break above 159.50 would put intervention back in play and likely cap the move below 160. Only a surprise BoJ hike or a sustained drop in US yields below 5.00% would break the floor and push the pair toward 155-156.

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