In Asian trading sessions, the Japanese yen experienced a second consecutive rise against the US dollar, distancing itself from recent two-month lows and the critical 160 barrier.
The Bank of Japan has identified the 160 level as a pivotal point, signaling potential intervention to stabilize the yen in the forex markets.
Boosting this upward movement is a recent decline in US 10-year treasury yields, coinciding with upcoming key US economic data releases and speeches from Federal Reserve officials.
As of the latest trading session, the USD/JPY pair decreased by 0.3% to 159.19, reaching a high of 159.70 yen per dollar.
On Monday, the yen appreciated by 0.1% versus the dollar, stepping back from its recent low of 159.93 yen per dollar.
Analysts point to a bullish stance among Bank of Japan policymakers following their June meeting, where several advocated for potential interest rate hikes to manage inflation.
The 160 threshold remains critical for the Bank of Japan, which expended $60 billion in late April to support the yen around this level amid market pressures.
Despite concerns over potential US scrutiny, including being added to a forex watch list, market observers anticipate continued efforts by Japan to bolster its currency.
US 10-year treasury yields declined by 0.1% on Tuesday, marking the third consecutive decrease, which has added pressure on the US dollar.
Investors are closely monitoring upcoming US economic indicators and Federal Reserve communications this week, which are expected to influence future monetary policy decisions.
