Traders expect the yen to fall to a 40-year low and become the next intervention threshold.

Observers are on high alert, expecting the exchange rate of the Japanese yen against the US dollar to fall to its lowest level in 40 years. Many believe this will be the next threshold for Japanese authorities to intervene. With traders increasing their bets on the Federal Reserve's interest rate hike this year, the US dollar has strengthened, causing the yen to fall to its lowest level since July 2024, reaching 160.80 against the dollar. The next key level for the yen is at 161.95, and if it breaks below that level, the yen will move towards its lowest record since December 1986. Many market participants believe that with the wide interest rate gap between the US and Japan, it is inevitable for the yen to move towards the next threshold. Japan intervened in the market with a record amount of 11.73 trillion yen between April 28 and May 27, but the gains from the intervention have all been wiped out.