The US dollar rose above the 155 level against the Japanese yen, increasing the risk of intervention by Japanese authorities.

On Wednesday, the US dollar rose 0.29% against the Japanese yen to 155.05, breaking through the 155 level for the first time since July. This increased the risk of Japanese authorities intervening to slow down the depreciation of the yen. Data shows that Japanese authorities spent a record 9.8 trillion yen (about 630 billion US dollars) in interventions at the end of April and beginning of May this year. After the yen fell to its lowest level since 1986 against the US dollar, Japanese authorities spent another 5.5 trillion yen on interventions in early July. The yen has been continuously weakening since Trump won the US presidential election, largely due to the strengthening of the US dollar and US bond yields. The current downward trend has brought the yen close to the levels at which Japanese authorities last intervened to boost the currency. A survey last month showed that economists expected the US dollar to yen exchange rate that might trigger intervention by Japanese authorities to be around 160. Prior to this, Japanese officials had already issued warnings about the unilateral fluctuations of the yen. Atsushi Mimura, the top official in charge of foreign exchange affairs at the Japanese Ministry of Finance, said last month that he was closely monitoring the foreign exchange market. Mimura said, "Currently, we are seeing slight unilateral and sudden fluctuations in the foreign exchange market. We will continue to closely monitor the foreign exchange market with a high sense of urgency, including any speculative activities." Trump's proposed economic policies could lead to continued expansion of the US economy and a return of inflation, which could further lead the Federal Reserve to keep interest rates high. In this scenario, the yen may further depreciate as doubts arise about the extent to which the interest rate differential between Japan and the US will narrow. Meanwhile, the continued weakening of the yen may prompt the Bank of Japan to consider raising interest rates earlier. Bank of Japan Governor Haruhiko Kuroda admitted in October that the exchange rate has been influencing Japan's price trends. Last week, former Bank of Japan Board member Kazuo Momma pointed out that Trump's victory in the US presidential election has increased the uncertainty facing the Bank of Japan, and the yen may further depreciate due to Trump's election, which could prompt the Bank of Japan to raise interest rates earlier.