USD/JPY traded just under 159.60 ahead of Friday’s Asia session, after rising about one big figure from around 158.50 on Wednesday. WTI jumped about 8% on Thursday to near $110, after earlier moves had briefly taken oil below $100.
Higher oil and firmer US yields reduced expectations of US rate cuts, which supported the US Dollar and pressured the Yen. As the pair nears 160, Japanese officials repeated that they are prepared to act against rapid Yen falls.
Japan Intervention History
In April–May 2024, Japan’s Ministry of Finance spent a record $62 billion intervening over about a month when USD/JPY moved through 160. In January 2026, USD/JPY briefly breached 159 and reports referenced a New York Fed “rate check”, though Japan did not confirm intervention.
Japan imports about 90% of its crude from the Middle East, and WTI above $110 raises the import bill. The Strait of Hormuz was described as effectively closed.
US March Nonfarm Payrolls are due at 12:30 GMT, with a +57K consensus after -92K in February. Weekly jobless claims were 202K versus 212K expected, and ADP showed +62K for March, while US cash markets are closed for Good Friday.
The Bank of Japan held rates at 0.75%, with markets pricing a 71% chance of a hike at the 27–28 April meeting. Wage growth is above 4%, core-core inflation is 2.5%, and the US–Japan rate gap is about 275 basis points.
Positioning Around The 160 Level
We are now looking directly at the 160.00 level in USD/JPY, a point where Japanese authorities spent over $60 billion on intervention back in 2024. With crude oil prices surging near $110 a barrel and pushing the US dollar higher, betting against the yen feels like standing in front of a train. However, the risk of a sudden, sharp reversal orchestrated by officials makes holding long positions extremely uncomfortable.
The US jobs report due later today is the immediate flashpoint, and it will be released into a market with dangerously low liquidity for the Good Friday holiday. A strong number, beating the expected +57,000 print, could easily trigger a chaotic surge through 160 and force Tokyo’s hand over the weekend. We must be prepared for extreme volatility on very thin volume.
For the coming weeks, the clear takeaway is to expect a violent move, making long volatility strategies sensible. Buying option straddles, which profit from a large price swing in either direction, is a direct way to position for the inevitable breakout or intervention. The premiums are high, but the risk of a multi-yen move in a single session is even higher.
This yen weakness is fundamentally driven by the enormous gap in interest rates, as the US Fed Funds rate sits around 3.50% while Japan’s is merely 0.75%. That 275-basis-point differential creates a powerful incentive to sell the yen that currency intervention can only temporarily stall. As we saw in 2025, until that fundamental gap closes, upward pressure on the pair will persist.
All eyes will soon turn to the Bank of Japan’s meeting on April 27-28, where the market is pricing in a 71% chance of an interest rate hike. A decision to hike rates could finally provide some real support for the yen, but any hesitation will be seen as a green light to sell it further. This meeting is arguably more important than any potential intervention.
Given the extreme risk of a sudden plunge, we should consider buying short-dated put options on USD/JPY to protect any exposure. This acts as insurance against a repeat of the massive, unannounced interventions seen in the past. The cost of protection is high, but it is a necessary price to pay when the Ministry of Finance has explicitly warned it is ready to act decisively.
