The risk of intervention has come back into focus for investors as they prepare for a weakening of the yen to ¥150 against the dollar and beyond.
The Japanese currency fell to ¥149.98 on Monday after two consecutive weeks of declines. The country suffered its biggest loss since 2009 in the five days to October 4. The prospect of further currency depreciation is prompting strategists to warn of increased intervention risk near the ¥150 level, or the 200-day moving average of ¥151.25.
Warnings from Japanese officials recently indicate that the market does not see interest rate differentials between the United States and Japan narrowing as quickly as previously expected. Prime Minister Shigeru Ishiba suggested the country is not yet ready for rate hikes, while robust data from the US prompted traders to limit their monetary easing there. US Federal Reserve Governor Christopher Waller said on Monday that the central bank should cut interest rates with caution.
