The decline of the Japanese yen deepens as half of the gains from the historic Bank of Japan intervention have already vanished.

The Japanese yen against the US dollar once fell by 0.8% to 159.06, making it the worst performer among the Group of Ten currencies, with more than half of the gains triggered by the historic joint intervention of the US and Japan already reversed. Tuesday is a public holiday in Japan, and traders are concerned that reduced liquidity could create conditions for another round of intervention. Nevertheless, recent interventions appear unlikely to change the yen’s weakness, as it faces several significant adverse factors, such as market concerns that Japan may increase fiscal spending. After the yen fell to near a 40-year low around 164 against the US dollar, Japan and the US launched their first joint yen-buying intervention since 1998 in early May. This intervention briefly pushed the yen up to around 155, but the rally soon began to fade.