After falling sharply against the dollar this year, the yen enjoyed a brief respite on Wednesday due to reports that the Bank of Japan (BOJ) may be preparing to intervene to support this coin. Government officials have in recent days stepped up their rhetoric, with Finance Minister Shunichi Suzuki in an interview noting that monetary intervention buying the yen is one of the government’s options. if it weakens further. Media reports have claimed, citing sources, that the central bank has been conducting rate checks in the money market. That step is often seen as a prelude to possible intervention, where central bank officials survey market participants to determine an indicative price for buying or selling the yen. News of the rate test led to a brief rally in the yen, rising more than 1% against the dollar to push the pair below 143. It traded around 143.41 yen. against the dollar on Thursday afternoon in Asia time. The yen has lost about 20% of its value against the greenback since the start of the year. It fell within a gap of 145 yen/dollar last week as investors bet that the BOJ will maintain its extremely loose monetary policy, despite the actions of central banks. other in the world. Is the intervention effective? Analysts CNBC Pro spoke with believe interference is a possibility, albeit a remote one. Yujiro Goto, head of forex strategy at Nomura, told CNBC Pro that intervention “still looks unlikely” below 145 – a key level that puts the pair within a notable gap of 146, 78, the level reached before Japan-US cooperation. Alvin Tan, head of Asia forex strategy at RBC Capital Markets, said the possibility of intervention was growing in 1998. According to Alvin Tan, head of Asia forex strategy at RBC Capital Markets, but Mr. don’t think it’s “imminent at this point.” While Max Lin, FX and rates Asia strategist at Credit Suisse, told CNBC’s “Street Signs Asia” on Thursday that “it’s not going to happen anytime soon.” “I don’t think BOJ and MOF [Ministry of Finance] there’s a problem with the dollar-yen at 145. They just think it’s coming too fast. So checking the exchange rate is just to get the market informed that they’re watching,” added Mr. Lin. Lin pointed to the relatively low inflation in Japan as another reason not to intervene. However, Chang Wei Liang, FX and credit strategist at Singapore’s DBS Bank, believes an intervention “cannot be ruled out”, with the yen currently “significantly deviating from the guidelines” its fundamentals” and the currency is “excessively volatile.” There is no guarantee that an intervention, if it occurs, will yield the desired results, however.”[Intervention] won’t break the dollar-yen uptrend as fundamentals remain, namely a strong US dollar, monetary policy divergence between [U.S. Federal Reserve] RBC’s Tan said. If you look at the US Dollar Index, that number is up about 14%. But when you look at the dollar-yen pair itself, you will see that it has increased by a lot more – 25%. He told CNBC Pro that the gain is almost double that of the US Dollar Index. Tan believes the main reason for the yen’s weakness is the widening monetary policy divergence between the Fed and the Bank of Japan. And that divergence could be set to widen further, with market watchers now bracing for a 75 basis point rally at next week’s US Federal Reserve meeting following a August inflation report was hotter than expected. Nomura, meanwhile, has predicted a full percentage point gain. Tan also cited Japan’s negative trade balance as another drag on the yen. Yen case head DBS Chan believes the yen will trade in the 140-145 range, with policy rhetoric making it “difficult” for the pair to exceed 145. While Nomura’s Goto believes the yen will trade at around 142.5 against the dollar at the end of the month, before strengthening to 135 by year-end. He added that the dollar-yen will trade in a “broader-than-usual” range of 130-147.5 for the rest of 202. Meanwhile, RBC’s Tan believes the dollar-yen is near the peak. “We’re expecting the dollar-yen to rally to the 150 range early next year, so we’re looking for a bit of upside [for the dollar]. That said, however, I can agree with the sentiment that most of the movement in the dollar-yen cycle has already been done. Mr. Tan believes that the continued change in the yen’s fortunes will lead to a weakening of the dollar. The BOJ will also have to raise rates to narrow the gap with the Fed. – an unlikely scenario, according to Tan.