The US dollar against the Japanese yen plunged more than 1% intraday, breaking below the 157 level. The market widely suspects that Japanese authorities have once again stepped in to intervene in the currency markets; however, because fundamentals such as the US-Japan interest rate differential remain persistently bearish for the yen, the impact of intervention is becoming clearly weaker, leaving Japanese authorities facing the dilemma of high intervention costs and difficulty in reversing the trend.


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