Dollar Strength Builds While USD/JPY Nears Critical Levels

The latest COT report shows growing bullish sentiment toward the US dollar, with futures traders increasing net-long positions for a second straight week and asset managers raising exposure to a 15-month high. Elevated oil prices and ongoing uncertainty around Middle East developments continue to support the dollar's outlook.

The Japanese yen remains under pressure as traders continue building bearish positions, pushing USD/JPY back toward the 160.00 area. This is a key level because it has previously attracted intervention from Japan's Ministry of Finance, increasing the risk of sudden volatility if authorities step into the market again.

Overall, futures positioning points to continued support for the US dollar, while bearish sentiment toward the yen is approaching extreme levels and keeping intervention risks firmly in focus.

USD/JPY Daily Chart