Bloomberg reported on Friday (October 25) that due to the elections in Japan and the United States casting a shadow of uncertainty over the market, the rapid decline of the yen this month has led some currency strategists to believe that the yen's exchange rate against the US dollar will fall to a low of 155 or 160 yen per US dollar in the coming weeks. This would bring the yen's exchange rate back to a level that could trigger official intervention by Japanese authorities.

Japan's Finance Minister, Katsunobu Kato, has already warned this week that he will "closely monitor the foreign exchange market with a stronger sense of urgency, including attention to speculative transactions."

Institutions such as Bank of America Corp., Mizuho Securities Co., and Asset Management One Co. are expecting the yen's exchange rate to reach 160 yen per US dollar.

On Wednesday, the yen fell as much as 1.4% against the US dollar, reaching a low of 153.19 yen per US dollar, the lowest level since the end of July. The US dollar/yen is on track to record its largest monthly gain since April 2022.

Political uncertainty is accelerating the yen's decline, with the House of Representatives election in Japan on Sunday leaving investors uncertain about the yen's prospects. The election results could complicate communication between the government and the Bank of Japan.

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Chief strategist at Mizuho Securities, Shoki Omori, stated: "Since the Bank of Japan will not take action in October, if US interest rates remain high before December, there is a high likelihood that the yen will reach 160 per US dollar at this rate of depreciation."

The 160 level is close to the level at which Japanese authorities last intervened to support the yen. A survey of 53 economists by Bloomberg showed that the median forecast for the yen exchange rate that could trigger intervention is 160.

Shusuke Yamada, head of Japanese currency and interest rate strategy at BofA Securities Japan in Tokyo, pointed out that if the momentum of short yen positions strengthens in the short term, there is a risk that the yen could fall to 160 yen per US dollar. The yen has already weakened against the US dollar, but speculative long yen positions have not yet adjusted to such an extent.

Chief investment strategist Charu Chanana, when discussing the closely watched US non-farm employment report, said: "Only very weak non-farm employment data can change the direction of the US dollar/yen at this point."

Bank of Japan Governor Haruhiko Kuroda stated on Thursday that the recent depreciation of the yen is partly due to market optimism about the US economic outlook, and the Bank of Japan needs to further examine whether this optimism will continue.