The Japanese yen is the worst-performing currency among G-10 nations this month, as the fading impact of recent official intervention keeps traders on high alert for another potential move by authorities.

The yen has weakened roughly 0.5% against the US dollar in August, partially reversing the 3.2% gain it posted in July. The currency enjoyed a brief bounce on Friday after a weaker-than-expected US nonfarm payrolls report weighed on the greenback, but quickly resumed its downward trajectory.

With Japan observing a public holiday on Tuesday, traders are also concerned that thinner liquidity could create conditions ripe for a fresh round of intervention. Despite the unprecedented joint intervention by Japan and the US, the yen's weakness appears set to persist, fueled by headwinds such as concerns over potential increases in Japanese fiscal spending.

Strategists at Nomura Securities, including Yujiro Goto, noted in a report that Japan's upcoming Obon holiday period may limit market participation, while the domestic economic calendar remains relatively light. Market focus will stay on the stance of Japanese and US authorities toward intervention, with investors closely monitoring official commentary.

Japan and the US conducted their first joint yen-buying operation since 1998 near the start of this month, after the yen slid to around 164 against the dollar, its weakest level in nearly 40 years. The intervention drove the yen to a high of roughly 155, but the rally has since dissipated, and the currency has now slipped past the 158 mark.