USD/JPY Outlook: Oil Prices Support Upside but Intervention Risk Near 160

USD/JPY is still supported because higher oil prices hurt Japan more than the US. The US produces its own energy, but Japan depends on imports, which increases inflation and slows growth. This keeps the gap between US and Japanese interest rates wide and supports the pair moving higher.

Markets are also showing clear yen weakness, not just dollar strength. Japan already has very high debt, an ageing population, and rising bond yields, which is increasing pressure on the yen.

Technically, the trend is still upward while the price stays above 157.50. The 160 level is very important because the intervention risk increases there. A break above 161.95 could open the door for more gains.

Buyers should be careful near 160 because the BOJ intervention risk is high. The RSI also shows the market is overbought. It is better to wait for any BoJ intervention to create dip-buying opportunities or wait for a clear break above 161.95 to confirm further upside toward new highs.

However, easing Middle East tensions, weaker US jobs data, or stronger action from Japan could push the pair lower.

USD/JPY Daily Chart