The yen has fallen to its lowest level against the dollar in about 34 years, increasing speculation of intervention.

The yen has depreciated to its lowest level against the dollar in about 34 years, leading to speculation that Japan will enhance efforts to slow down the yen depreciation. On Wednesday, the yen fell by 0.3% against the dollar to 151.97 yen, breaking below the level of 151.95 yen in October 2022. However, due to comments by Finance Minister Toshimitsu Suzuki that the Japanese government will take bold measures if necessary, the loss of the yen has narrowed.

Investors expect that even if the Bank of Japan has ended the negative interest rate mechanism last week, the spread between Japan and other advanced countries (especially the United States) remains large. Investors prefer high-yielding currencies of other countries, which has become a burden on the yen.

According to reports, options traders are watching the yen-dollar exchange rate closely, as it approaches the 152 yen resistance level. If this level is breached, investors holding inverse call options will need to cover a large number of short positions in the yen-dollar pair, which could lead to an expansion of the upward trend in the yen-dollar exchange rate.

Kazuto Kanda, Japan's Vice Minister of Finance for International Affairs, said on Monday that the current weakness of the yen is inconsistent with fundamentals. Vice Minister Kanda stated, "We intend to take appropriate measures to deal with excessive volatility and do not intend to exclude any options."

Japan has spent more than 9 trillion yen (59.3 billion dollars) in three market interventions in September and October 2022 to support the yen. The first intervention took place when the yen exchange rate was significantly higher than the current level.