Japan Holds Off Yen Intervention as USD/JPY Stays Near 161.70

As of June 26, Tokyo is expected to tolerate further yen weakness and delay fresh intervention until USD/JPY approaches the 160-162 zone. The stance follows Finance Minister Katayama’s June 22 emergency call with Treasury Secretary Bessent and a reaffirmed Japan-US pact, which produced only a mild pullback. Despite the Bank of Japan’s 25bp hike and stretched short-yen positions, the pair has held near 161.70-161.95, with authorities citing U.S. relations, G7 considerations, and equity volatility as reasons for restraint. Citi projects any intervention would target a retreat to 155-157, with effectiveness improved below 155. Markets continue to watch the 161.96 level last seen in 1986 as the key trigger.