Yen's slide to weekly loss prompts bets for another intervention

The yen experienced its largest weekly decline in three months, dropping nearly 1% to 159.43 per dollar, as the effects of U.S. and Japanese intervention waned. Traders now expect another round of official purchasing to be necessary to halt the decline. The currency reached near four-decade lows before intervention, driven by low interest rates and questions about government spending and financing.

The broader market remained relatively stable, with the dollar benefiting from higher oil prices and lessened worries about U.S. rate hikes. The euro slipped slightly, while the sterling held steady. Japan might conduct more joint yen interventions and hint at faster-than-expected interest hikes to prevent further losses. Former top currency diplomat Mitsuhiro Furusawa told Reuters this could be imminent.

Many market participants now believe the Bank of Japan will raise rates more frequently and sooner than anticipated following U.S. Treasury Secretary Scott Bessent's suggestion that Japan should combine intervention with policies that support the yen.