The yen has weakened slightly and is approaching a critical level against the US dollar, which may reinforce market speculation that the Japanese authorities will once again support the yen. As the Tokyo market was closed due to a holiday on Tuesday, market fluctuations were moderate, but traders were preparing for the yen to fall to 160 yen per dollar. 160 is a critical level that has constrained the yen's further depreciation in the past. During the London trading session, the yen fell 0.1% to 159.39 against the US dollar. On Monday, the yen recorded its biggest one-day decline since mid-February, falling 1%. The dollar strengthened against most G10 currencies on the same day. The yen has now erased nearly half of its gains since July 31. At that time, Japan and the United States implemented their first coordinated intervention since 1998 to support the yen. Masayuki Nakajima, senior strategist at Mizuho Bank, wrote in a report: “If USD/JPY clearly breaks through the psychologically significant 160 mark, market concerns about intervention may further heat up.”

The yen has weakened slightly and is approaching a critical level against the US dollar, which may reinforce market speculation that the Japanese authorities will once again support the yen. As the Tokyo market was closed due to a holiday on Tuesday, market fluctuations were moderate, but traders were preparing for the yen to fall to 160 yen per dollar. 160 is a critical level that has constrained the yen's further depreciation in the past. During the London trading session, the yen fell 0.1% to 159.39 against the US dollar. On Monday, the yen recorded its biggest one-day decline since mid-February, falling 1%. The dollar strengthened against most G10 currencies on the same day. The yen has now erased nearly half of its gains since July 31. At that time, Japan and the United States implemented their first coordinated intervention since 1998 to support the yen. Masayuki Nakajima, senior strategist at Mizuho Bank, wrote in a report: “If USD/JPY clearly breaks through the psychologically significant 160 mark, market concerns about intervention may further heat up.”