The Japanese yen hovered around 163 per US dollar after hitting a four-decade low of 163.24 earlier this week, as traders weighed the prospect of faster BOJ rate hikes and potential currency intervention. Reports on Wednesday indicated that the BOJ is on alert to upside inflation risks that could prompt it to raise rates more quickly than markets expect. Finance Minister Satsuki Katayama also reiterated that the government is prepared to take decisive action in the forex market if necessary. However, these have done little to reverse the yen’s broader weakness amid a firm US dollar and Japan’s relatively low interest rates. Sentiment toward the currency has weakened in recent weeks as investors navigate a changing policy backdrop under PM Sanae Takaichi, whose administration has struggled to dispel perceptions that it could pressure the BOJ to delay rate hikes. Rising Middle East tensions are also raising concerns over Japan’s economy, given its heavy reliance on imported energy.