The yen strengthened against the dollar and euro on Monday as investors watched for signs of further intervention after Tokyo and Washington stepped into the foreign exchange markets last week to support Japan's currency.
Japan and the U.S. conducted coordinated yen-buying intervention and will not hesitate to take further action, Japan's Finance Ministry said on Monday.
The Japanese currency JPY= was last up 0.18% at 157.05 per dollar, remaining at its strongest level in about three months.
"It became clear by Friday that there was an intent, and more, of an announcement of the U.S. actually working together with the Japanese to intervene in the FX," said Juan Perez, director of trading at Monex USA.
"The main thing is trying to understand how likely this is going to happen again because these operations are also expensive."
Japan may have spent as much as $36.58 billion to buy yen in the latest action aimed at strengthening the currency, central bank data indicated on Monday. That brings the total amount spent on its two FX interventions this year to more than $100 billion.
The yen also advanced against other currencies such as the euro and sterling, stirring speculation that Japanese authorities could be in the market again.
"I've mentioned it many times that the next step is for the U.S. Treasury to get involved and Scott Bessent actually hinted at it some time ago that they would be supportive of Japan," said Eugene Esptein, head of structured products for Moneycorp North America.
"They've finally gotten involved. But will they do it again? The Bank of Japan spends substantially more doing this as they should. But the risk here is that treasuries are being sold to fund these transactions and I don't know what part of the curve they're selling. They just have to be careful of the mechanics of this because they could just push bond yields higher."
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