The yen's weakness intensifies, erasing nearly half of the gains from the historic Japan-US intervention.

The Japanese yen fell by as much as 0.8% against the US dollar to 159.06, making it the worst performer among the G10 currencies. Half of the gains fueled by the historic joint intervention between the US and Japan have now been reversed. Tuesday is a public holiday in Japan, and traders are concerned that lower liquidity may create conditions for a new round of intervention. Nevertheless, recent interventions appear unlikely to change the yen’s weakness, as it faces several significant headwinds, such as market concerns that Japan may increase fiscal spending. After the yen fell to nearly a 40-year low near 164 against the US dollar, Japan and the US launched their first joint yen-buying operation since 1998 earlier this month. The intervention initially pushed the yen to strengthen to around 155, but the rally has since begun to fade.