The weakening of the Japanese yen to nearly 150 per dollar has raised concerns about the possibility of intervention by Japanese authorities. However, propping up the currency may prove difficult given the hesitancy of the Bank of Japan (BOJ) to exit its ultra-easy monetary policy while the US Federal Reserve contemplates further rate tightening. Intervention is financially risky and politically contentious, requiring the BOJ to draw down substantial amounts of dollar reserves. Furthermore, Tokyo may face a difficult task justifying its need to intervene in the currency market to other major economies committed to market-determined exchange rates.

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