Yen fell in Asian trade on Tuesday against a basket of major rivals, sharpening losses for the third straight session against the dollar and plumbing two-week lows, triggering concerns of yet another intervention by Japanese authorities.

Yen is approaching the red line that the Bank of Japan seemed to have demarcated with serious intentions to intervene in order to defend.

Otherwise, traders await important US inflation data this week, which will provide important clues on the future of monetary policy.

The Pair

The USD/JPY pair rose 0.2% to 156.50 yen, the highest since May 1, with a session-low at 156.12.

The yen lost 0.3% against the dollar yesterday, the second loss in a row as markets focus on the Japan-US interest rate gap.

The 160 Red Line

The 160 has become a red line for the Bank of Japan, so its likely itll intervene if the USD/JPY pair threatens to fall once again below.

Japanese authorities intervened last week and pumped $60 billion in the forex market to bring the yen higher against main rivals after it hit 1990 lows.

Japanese Government

Japans finance minister Shinuchi Suzuki said the government will work closely with the Bank of Japan to monitor the forex market and ensure stability.

He added the government is also monitoring interest rates closely when asked about his reaction to the BOJs sudden decisions to cut the amount of government bonds it purchased this week.

The IMF

The International Monetary Fund said that Japan should allow the yen to move flexibly, which would help the BOJ to focus on stabilizing prices through monetary measures.

US Inflation

Later today, US producer prices data will be released for April, while tomorrow, US consumer prices data is scheduled for release, and itll be crucial for gauging the likely path ahead of monetary policies.