Markets still eyeing intervention – OCBC

USD/JPY is trading near recent highs, with expectations that Japanese authorities may intervene soon. The pair is currently at its highest level since 1986, prompting concerns about excessive volatility. If USD/JPY continues to rise rapidly towards 164-165, intervention could become a reality. In the meantime, the pair will be influenced by UST yields and the strength of the USD. To see a reversal in USD/JPY, either the USD would need to weaken or the BoJ would need to signal a shift in monetary policy. The current outlook suggests that the path of least resistance for USD/JPY is still to the upside, with resistance levels at 161.20 and 164, and support levels at 157.70 and 156.60. Bullish momentum remains strong, but caution is advised as the RSI is in overbought territory.