The Japanese yen has continued to weaken against the U.S. dollar recently, edging closer to the critical psychological threshold of 160, sparking strong expectations in the market that Japanese authorities may once again step in to intervene. During Tuesday's trading session, the yen briefly dipped to 159.39 against the dollar before narrowing its losses to close around 159.28. Traders remain on high alert, warning that a clear break above the 160 mark could directly trigger intervention from the Japanese government.

Previously, the yen experienced a sharp drop on Monday, falling 1% in a single day—its largest daily decline since mid-February—erasing part of the gains achieved from the first joint currency intervention by Japan and the U.S. since 1998. In late July, the yen had approached a nearly 40-year low of 164 per dollar, but subsequently rebounded to a high of 155 earlier this month, spurred by the joint intervention. Institutional analysts believe that the coordinated efforts by Japan and the U.S. to boost the yen sent a clear signal of their commitment to driving the dollar-yen exchange rate lower, marking a significant policy turning point.

As market focus shifts back to fundamentals, the yen's weakness has re-emerged. Bank of America forex strategists point out that the market impact of the previous round of intervention has largely faded, and without further policy follow-through, the yen will continue to face downward pressure in the current macroeconomic environment. A senior strategist at Mizuho Bank also emphasized that once the dollar-yen rate decisively breaks through the symbolic 160 defense line, market concerns over intervention by Japanese authorities will inevitably escalate.

Although both Tokyo and Washington have issued warnings that they will take action again if necessary, industry consensus holds that currency intervention alone is unlikely to fundamentally reverse the situation. The massive interest rate differential between the U.S. and Japan, uncertainty over Japan's fiscal outlook, and its reliance on energy imports remain the core factors weighing on the yen's performance. Market strategists note that intervention cannot eliminate the huge interest rate gap between the two countries. For the yen to achieve a genuine trend reversal, it will ultimately depend on the Bank of Japan adopting a more hawkish policy stance, such as implementing larger interest rate hikes or extending its tightening cycle, to fundamentally reverse the market's pessimistic expectations.