USD/JPY Breakout Above 160.00: Will BoJ Intervene?

The Japanese Yen's technical analysis is pointing to a potential breakout above 160.00 in USD/JPY, but there are still questions about whether the Bank of Japan (BoJ) will intervene to defend this level.

Bulls have been clawing back in the pair following the dual intervention two weeks ago, which stalled just inside of 165. Despite rumors of a BoJ rate hike in September, buyers remain aggressive on pullbacks and support, leading to a new line in the sand at 160.00 or beyond.

The carry trade remains positive for longs, with inflation in Japan coming in at 1.7%, half of what was printed in the US at 3.4%. This suggests that there is still no pressing demand for a rate hike, and markets seem to be sniffing this out already.

A short-term ascending triangle can be argued in USD/JPY, which is a bullish breakout formation defined by horizontal resistance and higher-lows. If bulls break above 160.00, it's unclear whether BoJ officials will respond with a rate hike or intervention to swat down the move.