USD/JPY: Dollar Chases ¥158.00 Despite Officials Closely Watching FX Swings

USDJPY −0.05% Key points: Dollar eyes 158.00 Yen still weak Officials on the lookout Japanese yen continued to depreciate against the stronger buck. Bessent’s visit to Japan didn’t faze the dollar-yen bulls. 💴 Dollar Bulls Keep Pushing Higher The USD/JPY continued climbing early Wednesday, inching toward the ¥158.00 level after rebounding steadily from May lows near ¥155. Traders are once again testing how much pain Japanese officials are willing to tolerate. Earlier this month, Japan allegedly intervened in currency markets to strengthen the yen after the pair had blasted above ¥160. The move knocked dollar-yen sharply lower — at least temporarily. Since then, the market has slowly crept higher again. FX traders apparently saw intervention not as a wall, but as a “please slow down” sign with very flexible interpretation. 🏦 Bessent Signals Support for Japan Scott Bessent said Tuesday that both the US and Japan agree “excess volatility” in currency markets is undesirable, comments seen as tacit support for Tokyo’s recent yen-buying operations. Speaking after meeting Prime Minister Sanae Takaichi, Bessent also expressed confidence that Kazuo Ueda can manage monetary policy without falling behind inflation pressures. Translation: Washington doesn’t appear eager to publicly criticize Japan for stepping into FX markets. That’s key because coordinated political backing can make intervention threats more credible.