The reversal above 159 within days of the coordinated intervention low near 155 suggests the market is actively testing where Japanese and US authorities draw the line, a dynamic that typically keeps two way volatility elevated without necessarily reversing the underlying trend. Westpac's base case that USD/JPY settles closer to 160 rather than retesting 165 implies participants may need further verbal or actual intervention to prevent renewed yen weakness, without expecting a decisive turn lower until US rate expectations shift. The bank's timeline, essentially ruling out a sustained yen uptrend before late 2026 and only modest declines through 2027 and 2028, points to a multi-year view rather than a near term trade, with the structural gap to the 1990 to 2019 average framing just how extreme current levels remain even several years out. ---Earlier:USD/JPY rises to the highest level this month---Westpac thinks the joint intervention story is fading fast, and with it any near term hope for the yen, pushing a genuine recovery out to 2027 and beyond.Summary:USD/JPY threatened to break through 165 this month before Japanese authorities sought US government support for coordinated yen buyingThe joint intervention and an accompanying PR campaign initially drove USD/JPY down from a peak of 164 to a low of 155USD/JPY has since reversed and traded back above 159 despite warnings of further action, according to WestpacWestpac expects further yen weakness without additional intervention, but sees a return to 165 as unlikely barring a marked deterioration in Japan's economyThe bank's base case is USD/JPY holding around 160 for the foreseeable futureWestpac does not expect a lasting yen uptrend until expectations for tighter US monetary policy recede, which it does not foresee before late 2026The bank forecasts USD/JPY at 154 by end-2027 and 146 by end-2028, still 32 per cent above the 1990 to 2019 30-year averageWestpac says the coordinated effort by Japanese and US authorities to arrest the yen's slide is already losing its grip, with USD/JPY reversing back above 159 within days of touching a low of 155, despite warnings that further action could follow. The pair had earlier threatened to break through 165 this month before Tokyo sought Washington's help, with joint yen buying and an active public relations campaign initially pulling USD/JPY down from a peak of 164.That bounce back above 159 leaves Westpac doubting the durability of the intervention without further follow through. The bank expects the yen to keep weakening from here absent additional action from both governments, as market participants test where the authorities' tolerance actually lies. Still, Westpac does not see a return to the 165 level as likely unless Japan's economic backdrop deteriorates markedly, framing USD/JPY holding near 160 for the foreseeable future as the more probable outcome.The bank's longer term view is similarly unhurried. Westpac does not expect the yen to begin a lasting uptrend until expectations for tighter US monetary policy recede, and it does not see that shift occurring before late 2026. Even once that turn begins, the bank expects progress to be slow, pointing to persistent doubts among market participants about the Bank of Japan's resolve to tighten policy meaningfully, along with Japan's comparatively limited exposure to the global technology expansion relative to South Korea, Taiwan and China.On Westpac's numbers, USD/JPY only reaches 154 by the end of 2027, before easing further to 146 by the end of 2028. Even at that later level, the bank notes USD/JPY would still sit 32 per cent above the 30-year average recorded between 1990 and 2019, a gap it describes as a truly historic divergence. The forecast profile implies that even a multi-year adjustment lower would leave the yen historically weak by pre-2020 standards, underscoring how far the structural relationship between the two currencies has shifted rather than pointing to any near term resolution. This article was written by Eamonn Sheridan at investinglive.com.