With the Bank of Japan’s interest rate decision due tomorrow, the Japanese yen has surged 3%, and the Japanese government may intervene in the foreign exchange market again.

According to Bitget market data, USD/JPY has plunged sharply and continued its downward trend, with a cumulative drop of over 400 pips and a daily decline of 3%. It is now trading at 158.5, marking the largest drop since the Japanese government intervened in the market earlier this year. Market speculation suggests Japanese authorities may intervene again to support the yen, as the Bank of Japan will announce its interest rate decision tomorrow. The yen has weakened significantly recently, hitting a nearly 40-year low. Although the Japanese government implemented a record total of 11.73 trillion yen (about $73.2 billion) in foreign exchange market interventions between April 28 and May 27 to prevent USD/JPY from falling below the 160 threshold, the yen has remained under pressure since then. According to foreign exchange reserve data released by Japan's Ministry of Finance, the funds needed for the Japanese government's recent forex market interventions are likely to come from sales of its held foreign securities assets, including U.S. Treasury bonds.