Japanese Yen: Oil prices keep USD/JPY near 160 resistance - BBH

FXStreetAug 11, 2026 2:15 PM

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Brown Brothers Harriman’s (BBH) Elias Haddad explains USD/JPY has retraced half of its post-intervention drop, with US–Japan rate spreads already narrowing in favor of the Japanese Yen (JPY). Haddad sees crude price spikes as the main obstacle to Yen gains and argues FX intervention can cap USD/JPY upside but not drive a sustained decline, highlighting major resistance at 160.00.

Yen gains constrained by high crude

"US-Japan rate spreads have already narrowed in favor of JPY, and we see room for further compression. The BoJ’s policy rate is near the lower end of its neutral range estimate (1.10%-2.50%) while Japan’s economy is operating above potential. In contrast, Fed policy is restrictive (assuming a neutral rate of 3.00%) and the economy is operating around potential."

"The bigger obstacle to JPY gains is the spikes in crude oil prices. Until crude retreats, FX intervention can contain USD/JPY upside but not force a sustained move lower. USD/JPY next major resistance is offered at 160.00."

"USD/JPY is consolidating yesterday’s gains, having retraced 50% of its intervention-driven drop since July 30."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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