FX.co ★ Yen Edges Up on Intervention Watch

The Japanese yen strengthened to approximately 156.6 against the US dollar on Tuesday, rebounding from losses seen in the previous session, due to speculation that Japanese authorities might intervene to halt the currency's decline. Notably, on Sunday, Takuji Aida, an adviser to Prime Minister Sanae Takaichi, indicated that Tokyo is ready to actively engage in currency market interventions to counteract the adverse economic effects stemming from a weak yen. This stance resonates with statements made by Bank of Japan Governor Kazuo Ueda and Finance Minister Satsuki Katayama. Market participants are closely watching this week's forthcoming US holidays, identifying them as potential opportunities for Japan to intervene, considering how periods of reduced liquidity could magnify the effectiveness of such measures. The yen has been on a downward trajectory since early October following Prime Minister Takaichi's election. Her administration has introduced a substantial fiscal package and expressed support for maintaining an accommodative monetary policy.