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The yen has weakened below the 155-per-dollar mark as the Bank of Japan (BOJ) embarks on its two-day rate-setting meeting. The currency has been under pressure, with the US dollar breaking above the key psychological threshold for the first time since 1990. Speculation has been rife that Japanese authorities may intervene to support the yen, but no such action has been taken yet. The BOJ is expected to maintain its ultra-loose monetary policy stance, making significant appreciation of the yen unlikely, despite its historically low levels.

The Japanese yen remained weak against the US dollar on Thursday, hovering around 155 yen per dollar as the Bank of Japan (BOJ) commenced its two-day rate-setting meeting. Market participants anxiously await any potential intervention from Tokyo’s policymakers. Despite speculation of intervention to support the yen, the dollar surpassed the psychologically significant 155 yen level, reaching its highest point since 1990. The BOJ’s policy deliberations are expected to maintain short-term interest rates unchanged, prompting expectations of continued gradual policy tightening and low terminal rates. This outlook makes it challenging for the yen to appreciate significantly, despite its historically low levels. However, BOJ Governor Kazuo Ueda has indicated a willingness to raise rates if inflation continues to accelerate towards the 2% target. Broader currency markets witnessed the dollar regaining ground after earlier losses, buoyed by upbeat business activity data from the euro zone and the UK. The euro and sterling rose but later retreated slightly, while the dollar remained firm against other major currencies.

As of early evening in Tokyo, Japanese officials have remained conspicuously silent amid the steady rise of USD/JPY. This unusual lack of verbal intervention has raised expectations that the Japanese government may be hoping traders will interpret the quiet as a warning and refrain from pushing the currency pair beyond 155.00. The silence has contributed to a relatively muted day in broader markets, with the dollar holding steady against the euro and pound and European indices showing only marginal gains.

The US dollar struggled on Wednesday, extending losses incurred against the euro and sterling on Tuesday. The euro and sterling both benefited from positive economic data, while weaker US business growth and easing inflation pressures weighed on the dollar. Meanwhile, the yen remained weak despite intervention warnings from Japanese officials.

The Japanese yen remains near its lowest level since the mid-1990s against the strong U.S. dollar. Investors are watching for possible intervention from Japanese authorities as the yen approaches 155.00, a trigger point for past interventions. The Bank of Japan’s rate decision this week will also be closely monitored, as it could signal a more hawkish stance to combat the yen’s weakness. The dollar’s strength against other currencies, including the euro and sterling, has supported the possibility of continued yen weakness and U.S. dollar strength in the near term.