On Thursday, the yen lingered near its lowest level in 38 years, fluctuating above 160 against the dollar, as the market closely watched whether Japanese authorities would intervene to support the currency.
In the broader market, the dollar performed strongly due to the yen's weakness and climbed in sync with U.S. Treasury yields, nearing an eight-week high.
In early Asian trading, the yen rose slightly by 0.1% to 160.63 against the dollar, but remained close to the low of 160.88 hit on Wednesday, the weakest level since 1986.
With significant interest rate differences between the U.S. and Japan, the yen continued to be used as a funding currency for carry trades, dropping about 2% against the strong dollar this month and accumulating a 12% decline for the year.
In carry trades, investors borrow low-interest-rate currencies and invest the proceeds in high-yield assets.
Despite this, the yen's recent drop below the crucial 160 mark against the dollar has raised concerns among traders about possible intervention from Tokyo. From late April to early May this year, Japanese authorities spent 9.79 trillion yen (approximately 6.094 billion dollars) to push the yen up 5% from a 34-year low of 160.245.
