Speculation intensified over the weekend that Japanese authorities may be preparing to enter the foreign exchange market to curb the yen's decline, with the possibility of rare assistance from the United States.

On Friday, the yen surged by as much as 1.75% against the US dollar to 155.63, extending its gains from the Asian trading session and reaching its strongest level this year. Marking its largest single-day gain since August, the yen's sharp appreciation reversed a previous downward trend that had seen it approaching 2024 levels—a year when Japan had previously intervened to buy its own currency.

The yen's significant rise during US trading hours, coupled with reports from traders that the New York Federal Reserve had contacted financial institutions to inquire about the yen's exchange rate, fueled market chatter. Wall Street interprets these inquiries as potential groundwork for Japanese intervention to support the yen, suggesting the US government might even participate directly.

"Both US and Japanese authorities seem dissatisfied with the yen's current exchange rate level," stated Jason Furman, a Harvard University economics professor and former Chairman of the Council of Economic Advisors under President Obama. "Everyone is on high alert, prepared to respond to actions that could shift the market dynamics."