The recent strengthening of the US dollar has led investors to expect that Japanese authorities will intervene in the foreign exchange market again to limit excessive depreciation of the yen.

Additionally, expectations that the Bank of Japan (BoJ) will start tightening monetary policy have increased again, as the weaker yen has caused inflation to rise. While this makes exports more profitable, import costs also increase.

Meanwhile, the US dollar has slightly strengthened as investors anticipate that the Federal Reserve will only cut interest rates twice this year, with the first cut expected at the September meeting.