The yen's slide to the cusp of ¥150 per dollar has put investors on high alert for the risk of intervention. But, Japanese authorities could find propping up their currency both difficult to achieve and hard to justify.
At its core, the yen's 3% slide in September to its weakest in 11 months at ¥149.71 on Wednesday is a result of the Bank of Japan's hesitancy exiting an ultra-easy monetary policy while the U.S. Federal Reserve keeps its options open for further tightening. The yen strengthened to ¥148.76 by Friday afternoon in Tokyo.
The dollar-yen pair traditionally tracks the gap between the countries' long-term yields, which has yawned to 380 basis points in the dollar's favor. U.S. Treasury yields jumped after Fed officials surprised markets last week by hinting at another rate rise this year.