With the effects of intervention fading, the Japanese yen is the worst-performing currency this month, and the market remains alert to possible renewed official action.

1. The yen has been the weakest performer among G-10 currencies this month, as the boost from previous intervention measures is gradually fading and traders remain highly alert to the possibility of renewed intervention by Japanese authorities. The yen has fallen about 0.4% against the US dollar since August, partially erasing the 3.2% gain made in July.2. Last Friday’s US nonfarm payrolls report came in weaker than expected, briefly dragging the US dollar lower and prompting a temporary rebound in the yen, but the currency quickly resumed its downward trajectory. With Japan closed for a public holiday on Tuesday, market liquidity is tightening, which could create conditions for a new round of intervention and is further intensifying traders’ focus on official action.3. Despite the historic joint intervention previously undertaken by the US and Japan, the yen faces numerous negative factors, including market concerns over possible expanded fiscal spending in Japan, meaning the currency’s weakness is likely to persist. Nomura Securities strategists pointed out that the Obon holiday may limit market participation, and the domestic event calendar is relatively light, so the market remains focused on the stance of Japanese and US authorities toward intervention, with investors watching officials' statements closely.