Japanese Yen Trades Near Four-Decade Low Amid Intervention Speculation

The Japanese yen traded on Tuesday at levels close to its lowest point in approximately four decades, sustaining investor caution about potential intervention by Japanese authorities to bolster the currency.

The yen increased by 0.2% to 161.75 against the US dollar, recovering some of the losses it faced earlier in the session, yet it remained near the low of 162.84 recorded last week.

Against the British pound, the Japanese currency dropped to its lowest level since 2007, reaching 217.20 before regaining some ground.

In recent trades, the euro was recorded at 184.99 yen, following a 0.5% rise in the previous session.

Lee Hardman, chief currency analyst at MUFG, stated, "Speculation dominated late last week about the possibility of Japan intervening again to support the yen during the US holiday period amid low liquidity, but the absence of any action contributed to eroding some of the yen's recent gains."

In broader markets, the US dollar fluctuated as investors continued to reduce expectations for US interest rate hikes this year after a jobs report significantly underperformed forecasts.

The euro declined by 0.06% to $1.1434, while the British pound climbed to its highest level in over two weeks at $1.34005 before retreating slightly.

The US dollar index, which measures the currency's performance against a basket of currencies, remained steady at 100.90 points.

Investors currently anticipate the Federal Reserve to raise interest rates by approximately 29 basis points by December 2026, down from about 38 basis points a week earlier.

Attention is now focused on the minutes of the Federal Open Market Committee's June 2026 meeting, scheduled for release on Wednesday, as markets seek guidance on the future direction of interest rates.