The Japanese yen weakened toward 162.00 against the US dollar on Monday, extending losses for a second consecutive session as traders piled back into carry trades despite lingering intervention threats from Tokyo. The USD/JPY pair rebounded strongly from its two-week low near 160.45 hit Friday, signaling renewed risk appetite among currency speculators willing to borrow cheap yen to invest in higher-yielding assets.
The move highlights market complacency around Japanese authorities’ warnings, with traders betting that actual intervention remains unlikely at current levels. The yen’s decline comes even as Japanese officials have repeatedly signaled discomfort with rapid currency depreciation, which drives up import costs and inflation for the world’s third-largest economy. The sustained dollar strength reflects confidence in US rate differentials remaining favorable for carry strategies.
FXnCO Insight
Traders should monitor 162.00 as a critical technical level while maintaining tight stops, as Japanese intervention could trigger rapid yen appreciation without warning if authorities perceive speculative excess.
Source: FXStreet