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ForexHigh Impact•3 March 2026•

1 min read

USD/JPY Nears Intervention Levels Amid Robust US Data and Weak Japanese Inflation

Donald Trump against maps of the US and Iran, with oil barrels, pipelines, derricks, and upward financial charts amidst flames.

Key Facts

1The US dollar rallied on safe-haven demand following the eruption of the US-Iran conflict.

2US ISM Manufacturing PMI showed growth for the second consecutive month, with the prices index hitting its highest level since 2022.

The USD/JPY pair is trending higher toward potential intervention levels as a combination of robust US economic data and Japanese yen weakness persists. The US dollar gained significant traction following increased safe-haven demand sparked by the eruption of conflict between the US and Iran. Domestically, the US ISM Manufacturing PMI reported growth for the second straight month, with its prices index hitting the highest level since 2022. Conversely, Japanese inflation has dipped below the Bank of Japan’s 2% target, effectively dampening expectations for near-term interest rate hikes. Market participants have responded by scaling back Federal Reserve rate cut bets to 49 basis points by year-end, down from previous estimates of 58 basis points. This widening policy divergence between the Fed and the BoJ continues to exert upward pressure on the currency pair.