The yen rebounded against the US dollar following speculation of an intervention by Japanese authorities aimed at stabilizing the currency. The dollar declined, retracing to nearly 155 on the dollar-yen pair from its earlier peak above 160. This move came as a response to concerns about the yen’s steep decline to levels not seen in over three decades. Masato Kanda, Japan’s top currency diplomat, did not comment on the intervention, but risks remain for other interventions.

The depreciation of the Japanese currency had raised expectations of action from the Bank of Japan (BoJ). The yen’s weakness persisted due to low interest rates compared to other currencies like the dollar, favoring carry trades. The BoJ’s shift away from negative interest rates failed to dissuade traders from shorting the yen. Japanese bond yields rose near this year’s high and could climb further if expectations of interest rate hikes strengthen.

Traders now anticipate a series of Japanese economic data releases that could support the yen’s appreciation in case of stronger-than-expected figures. While projections suggest a decline in the unemployment rate to 2.5% in March, year-over-year retail sales in Japan are anticipated to decrease to 2.5% in March from 4.6%. On Wednesday, attention will shift to US data and the Federal Reserve interest rate decision.