On the international foreign exchange market, the yen's exchange rate against the US dollar fell to its lowest level in nearly three months, hovering around ¥150 per dollar. So far this month, the yen has depreciated by approximately 5.5% against the dollar, potentially marking its largest monthly decline since January 2022.

For this significant depreciation of the yen, foreign exchange analysts from the Royal Bank of Canada stated that the yen's weakness has long been attributed to the interest rate differential between the United States and Japan, as low interest rates tend to put pressure on a currency, while high interest rates tend to appreciate it. Japan has implemented a negative interest rate monetary policy for about eight years, keeping the yen weak relative to the dollar. Although the interest rate differential has narrowed with the Federal Reserve's cuts in interest rates and the Bank of Japan's hikes, recent hints from Federal Reserve officials that they will slow down the pace of interest rate cuts have kept the yen under pressure, as expectations remain for a significant interest rate differential between the U.S. and Japan.

Analysts from the National Australia Bank also stated that the recent optimism about the US economic outlook and the signals from Federal Reserve officials emphasizing a gradual and cautious approach to further easing monetary policy have supported the continuous rise of the US dollar. Meanwhile, the Bank of Japan may delay the next interest rate hike until next year, which could lead to further weakening of the yen.

Currently, almost all Japan Central Bank observers expect the Bank of Japan to "stand pat" and maintain the benchmark interest rate unchanged at the upcoming policy meeting on the 28th. Bloomberg analysis suggests that the Fed's cautious signals on interest rate cuts have led to a significant rise in U.S. Treasury yields, a widespread strengthening of the dollar, and a consequent depreciation of the yen. Particularly given the extremely low likelihood of a rate hike by the Bank of Japan at its meeting next week, the yen may resume its downward trend. By the end of this year, the yen is likely to fall back to the 150 yen to the dollar level. Institutions such as Bank of America and Mizuho Securities predict that the yen will touch 155 yen to the dollar.

The yen's renewed decline, especially as it once again falls below the key level of USD/JPY, has led institutions to anticipate that the Bank of Japan (BOJ) may intervene to support the yen. Forex analysts at Daiwa Securities Group believe that given the current momentum, the yen is likely to weaken further, prompting the BOJ to likely curb exchange rate fluctuations. Analysts at Nomura Securities further point out that a further weakening of the yen not only increases the likelihood of government intervention but could also prompt the BOJ to hint at the possibility of an earlier-than-expected interest rate hike as soon as the next policy meeting in November.