Yen Struggles as Japan Considers Intervention

The Japanese yen has been the weakest performer against a declining dollar as investors anticipate potential intervention by Japanese authorities to stop the yen's fall. A public holiday in Japan lightened trade, yet concerns remain about long-term economic impacts and fiscal policies affecting the currency.

The Japanese yen stumbled on Monday, trailing behind a generally weaker dollar, while traders closely monitored for any signs of market intervention from Tokyo. With a public holiday in Japan, Asian trading was sparse, leaving the yen down by 0.3% at 156.89 per dollar, just above last week's ten-month lows.

Market participants are prepared for intervention between 158 and 162 yen per dollar, eyeing a potential Thanksgiving-thinned trading period as an opportune moment for authorities to act. The yen's predicament stems partly from Japan's loose fiscal policies and some of the lowest interest rates globally, despite Finance Minister Satsuki Katayama's verbal warnings last week aiming to curb the currency's decline.

In other markets, the euro rose slightly as traders bet on a possible U.S. rate cut in December, while the dollar index remained mostly stable. As UK budget announcements approach, sterling held steady, with New Zealand and Australian dollars reacting to domestic rate and inflation concerns, respectively.

(With inputs from agencies.)