June 5 (Reuters) - USD/JPY could rise to test a 2026 peak despite fresh warnings from Japan about yen weakness. The Japanese currency weakened to the critical 160-per-dollar mark briefly in early trading, hitting the level for the third straight session. The 160 threshold is widely seen as a line in the sand for potential intervention by authorities in Tokyo. Japan is ready to respond at any time on foreign exchange and reserves the right to take "decisive action" against excessive volatility, Finance Minister Satsuki Katayama said on Friday. USD/JPY has seen a 159.30-160.09 range this week, according to EBS data. An internal model shows USD/JPY should be trading well above 160.

USD/JPY continues to trade above the 158.54 Fibonacci level, a 61.8% retrace of the recent 160.72 to 155.00 (EBS) drop. Also, as long tails were left on Wednesday and Thursday candlesticks, these signal a rejection of the downside.

There is scope for gains to rise to test the 2026 160.72 peak recorded in April, a break above which would put the Japanese authorities under pressure to act.
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(Martin Miller is a Reuters market analyst. The views expressed are his own)