Japan's yen stabilized near the 160 mark against the US dollar on Wednesday, keeping traders on high alert for potential government intervention.

As of around 11:00 a.m. in New York, the yen was trading nearly unchanged at 159.23 per dollar. The currency has depreciated more than 1% this month, erasing much of the gains triggered by a recent coordinated intervention between Japan and the United States.

At a critical juncture when the yen approached a 40-year low of 164, authorities from both nations stepped in to buy the currency. However, the limitations of such moves are evident, as the wide interest rate differential favoring the dollar has caused the yen to give back a significant portion of its rebound, bringing it back near the psychologically important 160 threshold.

Nathan Thooft of Manulife Investment Management stated, "It's too early to say that the intervention threat has disappeared."

"Japanese authorities have shown a willingness to act, including in coordination with the US Treasury. Levels near or exceeding the recent intervention zone could make traders cautious," he added. "We are certainly still monitoring for intervention closely."