(New throughout, updates headline and prices, adds analyst

comments)

* Yen extends last week's rally

* Japan spent as much as $36.58 billion on latest FX

intervention

* Dollar index set to snap four straight sessions of losses

By Chibuike Oguh

NEW YORK Aug 3 (Reuters) - The yen climbed against the euro

and the dollar on Monday, with markets watching for further

intervention after Tokyo and Washington stepped into the foreign

exchange market last week to support Japan's currency.

Japan and the U.S. conducted coordinated yen-buying intervention

and will not hesitate to take further action, Japan's Finance

Ministry said on Monday.

The Japanese currency was last up 0.51% to a high of

156.80 per dollar, its strongest level in about three months.

"It became clear by Friday that there was an intent and more

of an announcement of the U.S. actually working together with

the Japanese to intervene in the FX," said Juan Perez, director

of trading at Monex USA.

"The main thing is trying to understand how likely this is

going to happen again because these operations are also

expensive."

Japan may have spent as much as $36.58 billion to ​buy yen in

the latest action aimed at strengthening the ‌currency, central

bank data indicated on Monday. That brings the total amount

spent on its two FX interventions this year to more than $100

billion.

The yen also advanced against other currencies such as the

euro and sterling, stirring speculation Japanese authorities

could be in the market again.

The yen rose 0.62% to 180.31 versus the euro,

after hitting 179.435, the highest since mid-November 2025.

The yen has been under pressure for years, undermined by the

Bank of Japan's gradual approach to monetary policy tightening,

which has kept yield differentials wide between Japan and the

rest of the world.

Bank of America analyst Shusuke Yamada said the coordinated

action between Japan and the U.S. could alter market sentiment

that FX interventions are ineffective.

"The view that FX intervention cannot have a lasting impact

and merely alters short-term market flows seems right in many

cases. However, depending on the circumstances and broader

context, intervention can exert a significant influence on the

market, and trigger an inflection," Yamada said in an investor

note.

DOLLAR INDEX PARES LOSSES

The dollar index - which measures the greenback against a

basket of major peers - was higher, paring losses after the

yen's recent gains following the FX intervention.

The index was up 0.26% to 99.96, on track to snap

four straight sessions of losses.

The euro was down 0.13% against the dollar at $1.1506, after

hitting a fresh 1-1/2-month high at $1.1559.

An easing of geopolitical tensions typically weighs on the

dollar while supporting the euro and yen, as safe-haven demand

fades and concerns over energy-exposed economies recede.

The Federal Reserve Bank of New York sold euros for yen on

behalf of the Treasury through two banks, the Financial Times

reported.

Analysts also said the U.S. Treasury's reported decision to

intervene through the euro was to avoid signalling a desire for

broad-based dollar weakness.

The euro strengthened 0.18% against the Swiss

franc to 0.933. Sterling weakened 0.3% to $1.344.