Foreign exchange markets are on edge over possible yen buying after Prime Minister Takaichi vowed to act against speculative moves. Short sellers are nervous after the yen spiked to 155.73 per dollar, triggering fears of intervention. The weak yen hurts Japan’s economy, prompting officials to consider joint U.S.-Japan intervention.

The yen’s slide has raised concerns about import costs and inflation in Japan. It has lost over 5% against the dollar since Takaichi took office, leading to increased borrowing concerns. Traders believe the yen could rally further if U.S.-Japan buying occurs. Finance Minister Katayama shared worries with U.S. Treasury Secretary Bessent over the yen’s depreciation.

Speculation grows about a potential “Mar-a-Lago accord” to weaken the dollar against the yen and South Korea’s won. Currency trader Brent Donnelly suggests a stabilization or strengthening of the yen, won, and Taiwan dollar. Officials are discussing intervention to address the yen’s slide and its impact on the economy.

Read more at Yahoo Finance: Currency market on guard for intervention in Japan’s yen