Dollar Sinks Against Yen Amid Warnings of Further Intervention

The US dollar plummeted against the yen on Monday, briefly hitting its lowest level since early May. The dollar fell to as low as 155.20 yen before recovering slightly to 156.76-78 yen by 5 p.m., down from Friday's close of 157.33-43 yen in New York and 160.20-22 yen in Tokyo.

The euro also saw a slight decline, trading at $1.1526-1527 and 180.69-73 yen against its previous levels. The Japanese Finance Minister, Satsuki Katayama, declined to comment on whether another intervention had taken place, but his colleague, Atsushi Mimura, emphasized the importance of continuing joint action with the US.

Japanese stocks also took a hit, with the Nikkei index plummeting over 2 percent before recovering in the afternoon. The broader Topix index finished 1.08 percent lower at 3,960.03. Analysts attribute the decline to concerns that the surging yen could disrupt companies' business outlooks.

Takuya Kanda, a senior researcher at Gaitame.com Research Institute, cautioned that intervention is only a temporary fix and that coordinated intervention can make its effects last longer. The Bank of Japan's 10-year government bond yield rose by 0.025 percentage point to 2.820 percent, fueled by speculation about a rate hike.