In a move expected by investors, Japan intervened in the foreign exchange market to buy the yen for the second time in a month on Friday.
Following that, the market has witnessed a drastic price movement in the yen to jump back to 144.50 from 151.94 against the US dollar.
Price volatility in yen trading continued into Monday's Asian session, seeing the ninja currency once again make a surge at 145.28 against the greenback.
According to estimates by a Tokyo money market brokerage firm, Japan is likely to spend 5.4 trillion to 5.5 trillion yen during last Friday's yen buying intervention.
Even so, the measures taken by Japan are seen to have only a temporary effect on the yen currency.
This can be seen in the movement of the yen on Tuesday, where the currency is trading at around 148.80 against the USD.
This is because, the market continues to focus on the widening gap between the extremely loose monetary policy of the Bank of Japan (BOJ) and the continued increase in interest rates by the Federal Reserve (Fed).
Finance Minister Shunichi Suzuki said that the Japanese authorities will keep in touch with their counterparts in the United States and are ready to take appropriate action in the currency market against the yen's volatile movements.
