On December 24, the Financial Associated Press reported (edited by Niu Zhanlin) that on Tuesday local time, Japan's Finance Minister Kato Katsunobu stated that there has been a rapid unilateral fluctuation in the recent Forex market, and appropriate measures will be taken against excessive fluctuations to stabilize the weak yen.

When asked about the yen's further weakening, Kato Katsunobu responded, "Our stance has not changed, and I want to reiterate what I said; it is very important that the Forex market remains stable and reflects the fundamentals. The government has been shocked by currency fluctuations driven by speculators, and we will take appropriate intervention measures."

Kato Katsunobu clearly pointed out last week that the situation in the Forex market is concerning, indicating that the Japanese government is increasingly worried about the depreciation of the yen.

Recently, the dollar against the yen has fluctuated and risen, approaching the level of 1 dollar to 160 yen, and has dropped 4.7% this month, which keeps traders alert to any intervention by Japanese authorities.

Next, Bank of Japan Governor Ueda Kazuo will give a speech on Wednesday, and the central bank will also release a summary of the opinions from the December monetary policy meeting review committee on Friday. For Japanese monetary authorities, further weakening of the yen remains a risk they face.

Analysts stated that the low liquidity in the market during the holiday period amplifies the potential for significant fluctuations in the yen, but this may also make any intervention measures more effective, a scenario that has played out multiple times.

Takeshi Ishida, a Forex strategist at Kansai Mirai Bank, stated, "Regarding whether Japanese authorities will actually intervene, tensions may increase as the yen exchange rate approaches 160. If they intervene in a low liquidity environment, the appreciation of the yen may be greater."

Analyst Mukund Daga from Barclays pointed out that some hedge funds are betting the Yen will fall to the 160-165 range.

Last week, after the Bank of Japan decided to keep interest rates unchanged and Kazuo Ueda expressed a cautious stance on interest rate hikes, the yen plummeted significantly. In addition, the Federal Reserve released hawkish signals last week, indicating a slowdown in rate cuts next year, exacerbating the depreciation trend of the yen.

It is reported that since the beginning of this year, Japanese authorities have spent nearly 100 billion USD to support the yen. Some Analysts believe that the 161.95 level reached by the USD/JPY Exchange Rates in July is a potential threshold for Japanese authorities to intervene in the Forex market.

Market participants will closely watch Kazuo Ueda's speech on Wednesday to see if there is any change in tone. If Ueda reiterates that the Bank of Japan may delay interest rate hikes, it could further lower the yen.

The summary of the opinions from the members of the December monetary policy meeting of the Bank of Japan, to be announced on Friday, may provide more details regarding the rate hike proposal from the hawkish committee member Naoki Tamura, which could help strengthen the yen. However, if the summary mainly focuses on the need for more cautious interest rate hikes, the yen may fall again.

Tohru Sasaki, Chief Strategist at Fukuoka Financial Group, stated: "If the Japanese authorities intervene now, it may not work because the dollar is also strengthening, which could produce unnecessary effects. They may delay intervention until the USD/JPY Exchange Rates exceed 160, the level at which they last intervened."