USD/JPY Consolidates Before Further RiseUSD/JPYOANDA:USDJPYNouzTraderUSD/JPY entered a very tight bullish consolidation phase around the 161.50 level throughout Tuesday's Asian session. This sideways movement reflects the high level of tension in the foreign exchange market, where the US dollar's upward momentum is being held back by speculation of physical intervention from the Tokyo authorities. --------------------------------------------------------------------------------------------------------- ✅ Monetary Policy & Intervention Risk: Katayama-Bessent Emergency Meeting The foreign exchange market immediately went into high alert mode after Japanese broadcaster TBS released a report on the sudden diplomatic incident this morning: - 🔸Katayama-Bessent Online Meeting: Japanese Finance Minister Satsuki Katayama reportedly held an emergency online meeting with US Treasury Secretary Scott Bessent. The main agenda of the meeting was solely to discuss the extreme depreciation of the Japanese yen and coordination of potential bilateral market interventions. - 🔸Kihara Verbal Truce: Japanese Chief Cabinet Secretary Minoru Kihara reinforced the threat by stating that Tokyo would not hesitate to take appropriate legal action to punish speculative foreign exchange movements. ✅ Fundamental Foundation: Ghalibaf Keys to Hormuz & US Carry Trade Advantage Despite the risk of intervention, the Japanese Yen failed to gather the strength to reverse its trend due to two structural weakening factors: - 🔸Real Interest Rate Divergence: Although the Bank of Japan raised interest rates to 1.00% last week (the highest since 1995), this figure remains dwarfed by the Federal Reserve's benchmark interest rate of 3.50% - 3.75%. --------------------------------------------------------------------------------------------------------- ✅ Daily Chart Technical Analysis Technically, the USD/JPY long-term uptrend is still very much intact, supported by a solid macro indicator structure, but is beginning to detect overbought signals: - 🔸RSI (14) Touches Level 70: Conversely, the daily Relative Strength Index has now officially entered the overbought area. This indicates that the market is highly susceptible to a daily corrective pause (pullback) or horizontal consolidation, rather than forming a permanent short-term top. - 🔸Downside Defense Zone: If verbal or physical intervention triggers a sudden decline, the 160.50-160.60 area will act as the first dynamic support. Meanwhile, the 156.47 level is poised to become the last line of defense for the daily macro trend.