USD/JPY Consolidates Above 160.50 Near Two-Year High Amid Intervention Risks

The USD/JPY pair continues its sideways consolidation during early European trading on Thursday, holding just above the 160.50 mark. The pair remains near a two-year high touched in the previous session, driven by persistent dollar strength and wide interest rate differentials.

Market participants are closely watching for any signs of intervention from Japanese authorities, which has historically occurred around these levels. This caution is capping the upside for the yen, while the dollar remains supported by hawkish Fed expectations.

Technically, the pair is consolidating after a strong rally, with resistance near the 161.00 handle and support around the 160.00 psychological level. A break above 161.00 could open the door for further gains, while a move below 160.00 might trigger a sharper correction.