Yen hits weakest in 40 years as USD/JPY breaks above 162

The yen tumbled to its weakest level in four decades during Asian trading on Tuesday, with USD/JPY breaking decisively above the 162 mark for the first time since December 1986.

The pair surged to highs around 162.40 as traders shrugged off repeated warnings from Japanese officials. Chief Cabinet Secretary Kihara reiterated that Tokyo was ready to take necessary action on currency markets, but the statement failed to stem the yen's decline. Finance Minister Katayama followed with her own intervention rhetoric, repeating that Japan would respond appropriately to excessive moves. Market participants largely dismissed the verbal warnings, pushing the pair higher.

For forex traders, the break above 162 is a significant technical and psychological level. The yen's sustained weakness reflects the wide interest-rate differential between Japan and the US, as the Bank of Japan maintains ultra-loose policy while the Federal Reserve keeps rates elevated. Traders can track the ongoing move on NowPrice's live USD/JPY dashboard. The risk of actual intervention by Japanese authorities remains elevated, as the pace of depreciation accelerates.

Looking ahead, traders will focus on any follow-through above the 162.50 area, which could open the door to further gains. Key data releases this week include US ISM manufacturing and the June jobs report, which will shape Fed rate expectations. Any signs of actual intervention by the Bank of Japan would likely trigger sharp, short-lived yen rebounds, but the broader trend remains bearish for the yen as long as the rate differential persists.