After the U.S. intervened, investors remain skeptical about the movement of the yen.

A rare joint intervention in the foreign exchange market by the U.S. and Japan has helped the struggling yen recover from a 40-year low. However, maintaining the elevated yen exchange rate may prove to be a tough battle. The U.S. involvement has added weight to Japan's recent unilateral intervention actions. Japan's previous interventions barely supported the yen's exchange rate around 160 yen per dollar but failed to provide a lasting boost. On Monday, Japan's Finance Minister stated that Japan would "not hesitate" to intervene in the foreign exchange market again alongside the U.S. Analysts indicate that even with U.S. support, if the Bank of Japan does not change its policy, the yen may struggle once more. Despite facing inflation above its target, the Bank of Japan has maintained a cautious stance on interest rate hikes after battling the completely opposite risk of deflation for decades. This caution has prompted investors to turn to other currencies in hopes of earning higher returns from short-term bonds. Nabil Mirali, a fund manager at Edmond de Rothschild, stated, "If the Bank of Japan does not tighten its monetary policy, the yen will not be able to sustain its upward momentum."