As the Japanese holiday comes to an end, the risk of yen intervention is once again in the spotlight; the yen's two-week decline brought it once again close to the $160 to $1 mark that the market is closely watching. The yen rose slightly by 0.3% against the US dollar to around 157.85 in early trading in Tokyo on Thursday, but this had little impact on the past four consecutive days of decline. Given that the yen continued to weaken after the Bank of Japan policy meeting on September 18, strategists believe that the 160 mark will once again be a litmus test for the Japanese authorities' weak tolerance of the yen. Although the Bank of Japan has accelerated the pace of the austerity cycle, differences have arisen within the policy committee, and the Federal Reserve seems to be moving towards a more hawkish line.

As the Japanese holiday comes to an end, the risk of yen intervention is once again in the spotlight; the yen's two-week decline brought it once again close to the $160 to $1 mark that the market is closely watching. The yen rose slightly by 0.3% against the US dollar to around 157.85 in early trading in Tokyo on Thursday, but this had little impact on the past four consecutive days of decline. Given that the yen continued to weaken after the Bank of Japan policy meeting on September 18, strategists believe that the 160 mark will once again be a litmus test for the Japanese authorities' weak tolerance of the yen. Although the Bank of Japan has accelerated the pace of the austerity cycle, differences have arisen within the policy committee, and the Federal Reserve seems to be moving towards a more hawkish line.