June 23 (Reuters) - USD/JPY appears to have found an equilibrium on the 161 handle as was the case on 159 and 160, where the threat of Japanese FX intervention previously saw the pair pause. Intervention did not materialise then, and with broad U.S. dollar strength, USD/JPY has pushed up to current levels. Admittedly the pair has risen on more than USD strength. A Bank of Japan viewed as behind the curve , re-widening of short-end Japanese government bond and U.S. Treasury yield differentials, ongoing geopolitical uncertainties and Japan's reliance on energy and other commodity imports helped . In addition to this, USD demand from Japanese importers has been almost constant. Foreign investors purchasing Japanese equities and related currency hedges have added to this demand. Barring fresh FX intervention, USD/JPY could head higher still. A surge is likely if Japanese importer option barriers in the 162.00 area are taken out. More are expected above, likely at each big figure higher and especially massive at the 165.00 strike. With Japan's Ministry of Finance and the BOJ's currency desk probably aware of these option knock-outs, Finance Minister Satsuki Katayama's call with U.S. Treasury Secretary Scott Bessent may have been a discussion to prevent the yen from weakening further , and . Defence of these option barriers has temporarily capped USD/JPY at Monday's 161.93 EBS high. Just above at 161.96 is the last peak on July 3, 2024. Above 162.00 and 163.00, there are highs of 163.36 and 164.74 dating back to December and November 1986, respectively. Related comments , , , .
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JGB-US Treasury 2-year interest rate differential:

(Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)