According to analysts at Citigroup, Japanese authorities could enter the currency market and sell the euro if the exchange rate against the yen approaches ¥180.
The euro-yen pair hit a record high of ¥175.43 on July 11, a high since the common currency was launched in 1999, before falling again, with the pair trading around ¥171 in Tokyo on Tuesday.
Japanese authorities likely spent about ¥3.5 trillion ($22 billion) on July 11 to support their currency against the dollar, in what appeared to be the third intervention this year. The next day, the Bank of Japan conducted a rate control on the euro-yen pair, followed by another suspected intervention in the yen trade against the dollar. Rate controls typically signal that Tokyo is ready to intervene in the currency market.
