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fxJul 9, 2026, 4:12 AM

USD/JPY dips but bears lack conviction as rate gap offsets intervention risks

USD/JPY edged lower during Thursday's Asian session, breaking a four-day winning streak, but the decline lacked bearish conviction as the yield differential remains a key support.

USDJPY

The Japanese Yen attempted a slight recovery during the Asian session on Thursday, pushing USD/JPY below the mid-162.00s and snapping a four-day winning streak. Despite the dip, the pair remains near four-decade highs and lacks clear bearish momentum.

Traders remain hesitant on the Yen side. The wide US-Japan interest rate gap continues to underpin the dollar, even as Tokyo's intervention rhetoric warns against excessive yen weakness. This tug-of-war leaves USD/JPY stuck in a narrow range, awaiting a catalyst.

Spot prices are currently just below 162.50, still within striking distance of the multi-decade high. Without a decisive break, the near-term outlook remains neutral-to-bullish for the dollar.

Source: FXStreet Forex News