Japan's yen has weakened past 160 per dollar for the first time since early September, putting traders on alert for official intervention as Tokyo warns it stands ready to act again.

The currency slipped through the closely watched level overnight, touching a peak of 160.30 on Thursday, according to Reuters. Finance Minister Satsuki Katayama warned that Tokyo would respond to one-sided and rapid moves, while top currency diplomat Atsushi Mimura said it was "too early to forget" this summer's intervention.

US role smaller than signalled

Japan spent 15.4 trillion yen ($96.5 billion) supporting the currency in July and August after it sank to a four-decade low of 163.99 per dollar in late July. But a Federal Reserve Bank of New York report on Thursday showed Washington's part in the joint action was far smaller than signalled, amounting to about $497 million of euro sales to buy yen, against hints from Treasury Secretary Scott Bessent that it could reach $10 billion.

Analysts said the modest US contribution weakens the deterrent effect of any future joint action. "People have been worried that coordinated intervention could be very powerful, but this shows that it's not," said Tohru Sasaki, chief strategist at Fukuoka Financial Group and a former Bank of Japan official.

The yen's weakness has become a political headache for Prime Minister Sanae Takaichi's government, lifting import costs for fuel and other goods. Markets increasingly expect the Bank of Japan to raise rates at its 17-18 December meeting, but the dollar's broader rally, to a 19-month high on bets of a bigger Federal Reserve rate rise next month, has swamped that support. MUFG notes a 25-basis-point December Fed hike is now fully priced in, according to FXStreet.