US Treasury Secretary Bessent may be trying to nudge markets in one direction, but traders are not paying much attention. Despite his comments overnight, USD/JPY is once again testing the area above the 160.00 level on Tuesday.

The currency pair had already attempted to push above that figure on Friday after Fed Chair Warsh delivered more hawkish remarks. But when the dollar eased slightly yesterday, there was not much follow-through buying.

Traders are now having to absorb a broader selloff in global bonds, which is also spilling into US Treasuries. That matters for currency trading because moves in bond yields continue to shape the relative appeal of the dollar and the yen, especially when both the Federal Reserve and the Bank of Japan are in focus.

In Europe, bond yields are hitting highs not seen in more than a decade, while Japan’s initial budget request, the largest on record, is also driving local yields higher. That pressure is now extending to the United States, where the 10-year Treasury yield has jumped to 4.78%. That marks a clear breakout from the recent range, with the high previously capped closer to 4.75%.

Taken together, that is another factor supporting USD/JPY. Even so, traders need to remain cautious about the risk of intervention at these levels, since the 160 area has repeatedly drawn official attention in recent months.

With Bessent active on the issue and warning that Japan will take action to strengthen the yen, there is a case for believing that if upside momentum becomes too rapid, the Ministry of Finance could step in again.

At the same time, the Bank of Japan’s policy decision is still due later this month. Japanese authorities will typically prefer to let that decision take center stage rather than intervene beforehand, which leaves the pair sensitive to both policy timing and moves in global yields.

That does not mean traders have free rein to push the pair higher, however. The path of least resistance may still be for USD/JPY to rise, but any move is likely to be gradual given the intervention risks involved.

The 160 level remains a key psychological barrier. With yields continuing to rise, it is difficult to keep fighting the broader trend, even for the US and Japanese authorities.