Intervention back on investors’ radars as yen weakens against dollar

The risk of intervention has swung back into sharp focus for investors as they ready for the yen to weaken back to ¥150 against the dollar and beyond.

The Japanese currency dropped as far as ¥149.98 on Monday after two consecutive weeks of declines. It had the worst loss since 2009 in the five days through Oct. 4. The prospect of further depreciation in the currency is prompting strategists to warn of increased intervention risk near the ¥150 level, or the 200-day moving average of ¥151.25.

Notes of caution from Japanese officials recently mean the market now doesn’t see interest-rate differentials between the United States and Japan narrowing as quickly as previously expected. Prime Minister Shigeru Ishiba suggested that the nation isn’t ready for rate hikes, while robust data from the U.S. is pushing traders to trim bets of monetary easing there. U.S. Federal Reserve Gov. Christopher Waller said on Monday that the central bank should cut rates with caution.