According to Commerzbank, the International Monetary Fund's regulations stipulate that Japan can only intervene in the currency market two more times between now and November if it wishes to maintain its status as a freely traded currency. Each intervention must not exceed three consecutive trading days.

Strategist Michael Pfister noted in a report that this essentially means Japan's available resources are limited, a fact the market is well aware of.

He added that any intervention must be timed to achieve the maximum impact at the lowest possible cost.

To keep operational costs for Japanese authorities as low as possible, yen liquidity should also be at a reduced level when they step into the market.

Pfister pointed out that public holidays are particularly suitable for such actions, and fortunately, the US has an extended Independence Day weekend this week.

Commerzbank's view is that intervention is largely unnecessary as long as markets do not significantly accelerate the pace of testing higher levels for the USD/JPY exchange rate.

However, the bank also stated that this does not rule out the possibility of the Ministry of Finance taking action simply because the timing is opportune.