Yen at Risk: Intervention Concerns Amid Record Low Levels

The yen continues to struggle against major currencies due to a lack of aggressive action from the Bank of Japan, prompting officials to warn about potential intervention. Despite record bond yields, the cautious approach of BOJ Governor Ueda has spurred trading activities that could further pressure the yen.

The yen struggled on Monday, nearing record lows against the euro and Swiss franc, as traders, emboldened by the Bank of Japan's conservative approach, continued to bet against the currency. This occurred even as Japanese officials issued warnings to deter aggressive trading strategies.

In Tokyo, key currency diplomats signaled concerns over rapid yen movements, suggesting possible interventions. Recent policies and spending strategies under new Prime Minister Sanae Takaichi have raised concerns about further financial strain, impacting currency confidence.

Despite elevated bond yields, the cautious communication from BOJ Governor Ueda after last week's rate hike has amplified the yen's vulnerability. Meanwhile, the global currency market sees the euro and pound strengthening against the dollar, reflecting differing central bank stances.

(With inputs from agencies.)