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A dealer looks at monitors in the trading room at foreign exchange brokerage Gaitame.Com Co. in Tokyo on Oct. 20, 2022.

A dealer looks at monitors in the trading room at foreign exchange brokerage Gaitame.Com Co. in Tokyo on Oct. 20, 2022. (Toru Hanai/Bloomberg )

The yen's slump past the symbolic mark of 150 per dollar is keeping traders guessing when Japanese authorities will intervene to halt a further decline.

The Japanese currency has weakened by more than 5 yen per dollar since Japan stepped into the market in September, despite a barrage of warnings to dissuade traders from testing its resolve and speculation authorities were quietly intervening on a small scale. The yen slipped another 0.8% on Friday to 151.38, a 32-year low.

The 150 level was seen as important psychologically for Japan and the break may increase pressure on authorities to act. But officials have put the focus of their warnings on extreme and one-sided moves rather than suggesting they were watching any particular level.

"If moves reflect the rise in U.S. yields on rate hike prospects and the pace is slow, it makes it difficult for Japan to intervene and the dollar-yen looks set to slowly grind higher toward 155," said Hiroyuki Machida, director of Japan FX and commodities sales at ANZ in Tokyo. "But the slow pace of the pair's climb after touching 150 shows market players are wary of intervention and are cautiously treading water."

Finance Minister Shunichi Suzuki reiterated Friday that Japan was ready to act, saying that the recent sudden, one-sided yen weakness was undesirable and he was watching markets with a high sense of urgency.

"There's absolutely no change to our thinking that we'll take an appropriate response against excessive moves," Suzuki said. "Right now we're in a firm confrontation with speculators in the market."

If moves are rapid, or the yen is the only currency under pressure, falling to 150 against the euro for example, intervention will likely take place, said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

A gauge of the magnitude of current price swings in the yen -- one-week realized volatility -- is not far off the lows of the year.

The next major catalyst for investors will be next week's Bank of Japan policy meeting. Last month's intervention, the first since 1998 to support the currency, took place after BOJ Governor Haruhiko Kuroda reiterated his willingness to stick with super-easy monetary policy.

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