Yen Tumbles to Worst Week in Three Months, Japan Weighs Next Move

The yen's value is plummeting to its worst week in three months, and it appears that only drastic measures can save it. The currency has fallen to 159.37 per U.S. dollar, inching closer to the crucial 160 level that could trigger another intervention by Tokyo. The Bank of Japan has repeatedly stated that it stands ready to intervene again if needed.

Mitsuhiro Furusawa, Japan's former top currency diplomat, believes that the country should signal a chance for faster-than-expected interest rate hikes to arrest the yen's slide. He suggests that a joint operation with the U.S. could be conducted at any time.

The recent weakness in the JPY is attributed to the Bank of Japan's overly cautious stance and its policy rate, which remains too low. This has led to a positive carry for longs, making it a dangerous backdrop for both sides of the pair.