Dollar/Yen Slows at 164 as Intervention Fears Collide with Crude Oil Surge
The dollar/yen pair is approaching the psychologically significant level of 164, but its upside is being capped by concerns over potential yen-buying currency intervention by Japanese authorities.
Rising crude oil prices and higher interest rates are supporting dollar buying, with New York crude oil futures (WTI) recovering to above $90 per barrel following a tanker attack in the Red Sea.
However, Finance Minister Katayama's verbal warnings against yen weakness have had limited impact, and the perception that Japan's response remains confined to verbal intervention has encouraged yen selling.
The market is now focused on how dollar/yen will navigate the risk of actual intervention by the Japanese government and the Bank of Japan, with some analysts suggesting that the 162.84 level may have flipped from upside resistance to downside support.