By Ronnie Harui
The yen fell to a 40-year low against the dollar in Asia on Tuesday, with traders on high alert for potential foreign-exchange intervention after a top Japanese official warned authorities could step in to prop up Japan's currency.
Signs that U.S.-Iran peace talks would resume today and Wall Street's tech-led rebound overnight buoyed risk-on sentiment, which tends to weigh on safe-haven currencies such as the yen. Also, prospects for a slow pace of interest-rate increases by the Bank of Japan compared with ongoing expectations of a rate hike by the Federal Reserve spurred further yen weakness while the dollar strengthened.
The yen was recently 0.1% lower at 162.08 per dollar after earlier touching 162.40, the lowest intraday level against the greenback since 1986, FactSet data showed.
Japanese Finance Minister Satsuki Katayama said Tuesday morning that the authorities stand ready to take appropriate action, including a "decisive" one, in the foreign-exchange market as needed. Katayama said that she confirmed with the U.S. that decisive action was an option for the market.
Write to Ronnie Harui at ronnie.harui@wsj.com