Yen slides past 162 per dollar, 40-year low

The Japanese yen slumped to its weakest level against the U.S. dollar since 1986 on Tuesday, intensifying market speculation that authorities in Tokyo are poised to intervene directly in currency markets. The yen weakened past 162 to the dollar during Asian trading, marking a historic low and extending a prolonged decline driven by a wide interest rate gap between Japan and the United States.

Japanese Finance Minister Satsuki Katayama reiterated that authorities stand ready to respond appropriately to excessive currency moves, though she refrained from signaling immediate action. The yen is on track for a nearly 2% drop in the second quarter, its fourth consecutive quarterly decline, as investors favor the higher-yielding dollar.

Analysts widely view further intervention as inevitable but question its long-term effectiveness. A currency strategist at Commonwealth Bank of Australia noted it is a question of when, not if, Japan's Ministry of Finance intervenes again, but forecast that any action is unlikely to reverse the broader uptrend, predicting the yen could reach 164 per dollar by early 2027. The yen has largely shrugged off a record intervention effort between late April...