<p>The Japanese Yen is under siege. USD/JPY has advanced to 159.60 and is closing in on the 160.00 level — a psychologically critical zone that triggered direct Japanese government intervention in 2024. With oil prices crushing the Yen from the fundamentals side, the question is whether Tokyo will act again.</p>

<h2>Why the Yen Is Weakening</h2>
<p>Japan imports roughly 90% of its energy. With crude oil above $100 per barrel, Japan's trade deficit is ballooning, creating a structural drag on the currency. Meanwhile, the Bank of Japan has been cautious about raising rates, keeping the interest rate differential between Japan and the US extremely wide. This combination — energy import costs plus rate differential — is a devastating one-two punch for the Yen.</p>

<h2>The 160.00 Line in the Sand</h2>
<p>In 2024, Japan spent over $60 billion in currency interventions when USD/JPY breached 160.00. Japanese authorities have been increasingly vocal in recent weeks, using phrases like "decisive steps" and "with a high sense of urgency" — language that historically precedes actual intervention. Finance Minister officials have been spotted at the Ministry of Finance late at night, which market veterans interpret as preparation for action.</p>

<h2>How Intervention Works</h2>
<p>Japanese intervention typically involves the Bank of Japan selling US Treasuries and buying Yen in massive quantities, often $20-30 billion in a single session. The initial impact can be a 300-500 pip reversal in minutes. However, past interventions have shown diminishing returns — they slow the trend but rarely reverse it permanently without fundamental change.</p>

<h2>What Traders Should Expect</h2>
<p>If USD/JPY breaks above 160.00, the probability of intervention rises dramatically. Traders should be prepared for extreme volatility in either direction. Long USD/JPY positions near 160 carry significant intervention risk, while the pair could spike to 162-165 if intervention fails to materialize.</p>

<p><em>This article is for educational purposes only and does not constitute investment advice. Trading CFDs involves significant risk of loss.</em></p>