USD/JPY slips as Yen gains on intervention threats and BoJ's hawkish tone

• Japanese officials warn against excessive FX moves, boosting the Yen amid rising intervention threats.
• BoJ Governor Kazuo Ueda signals rate hikes remain possible as FX weakness fuels inflation.
• US Dollar eases slightly despite geopolitical tensions as markets await US employment data.

The USD/JPY fell to near the 159.00 level, extending its slide below the 160.00 barrier on Tuesday as the Japanese Yen (JPY) finds support from intervention threats and hawkish signals from policymakers, while the US Dollar (USD) eases slightly despite the ongoing war with Iran.

From the United States (US) side, recent rhetoric from President Donald Trump continues to shape sentiment. While earlier comments helped boost the USD by reinforcing confidence in the US economy and downplaying the economic fallout from rising Oil prices, markets are now reassessing risks amid evolving geopolitical headlines.

The New York Post publishes President Trump's comments:

US has more work to do in Iran war.

US doesn't have to be in Iran much longer.

Hormuz Strait will 'automatically open.'

Other nations can reopen Hormuz Strait.”

Meanwhile, the JPY is gaining traction as authorities ramp up verbal intervention. Japan’s Finance Minister, Satsuki Katayama, described recent currency moves as “speculative” and reiterated readiness to act against excessive volatility, signaling that officials are closely monitoring FX developments.

Additional support for the Yen comes from growing expectations that the Bank of Japan (BoJ) may tighten policy further. Governor Kazuo Ueda emphasized that exchange rate movements are having a meaningful impact on inflation and that persistent Yen weakness could justify rate hikes.

Short-term technical analysis:

In the 4-hour chart, USD/JPY trades at 159.03. The near-term bias turns mildly bearish after the pair slipped back toward the lower end of its recent range and now flirts with the 20-period Simple Moving Average (SMA) at 159.74 while holding only marginally above the rising 100-period SMA at 159.05. The loss of upside momentum is reflected in the Relative Strength Index (RSI), which has retreated from the mid-60s to around 40, signaling fading buying pressure and leaving the pair vulnerable to a deeper pullback while below the short-term average cluster.

Immediate support emerges at 159.02, just above the 100-period SMA, with a clear break opening the way toward 158.90 as the next downside level. Below that zone, sellers would gain traction and expose a more pronounced correction. On the topside, initial resistance stands at 159.42, followed by 159.56, where prior reaction highs converge with the short-term average band. A recovery through 159.56 would ease the current downside bias and re-establish the broader uptrend toward the 160.00 area.

(The technical analysis of this story was written with the help of an AI tool.)