Yen briefly tops 158 per dollar, fueling rumors of government market support

In Tokyo on Thursday evening, the yen briefly breached the 158 per dollar threshold, prompting talk of possible official intervention to halt its decline. At 5 p.m. local time the currency was trading near 163.73-74 per dollar, a sharp rebound that caught many market actors off guard. The rally followed the Federal Reserve's decision to keep its key rate steady and preceded the Bank of Japan's announcement from its two-day policy meeting.

Some traders speculated that the timing aligned with a government-led yen purchase, recalling the last known foreign-exchange action in April-May when officials sold dollars for yen. Prime Minister Sanae Takaichi used the same forum to unveil a plan to reduce the consumption tax on food and beverages to 1% for two years starting next April, a move critics say could worsen Japan's already strained public finances.