NEW YORK >> The dollar slipped from an eight-week high against the yen today, with traders back on alert for government intervention to support the Japanese currency after it hit just shy of 160, a level that earlier triggered action from the Ministry of Finance to prop it up.

The greenback rose to 159.94 earlier in the session, the highest since April 29, when the yen touched a 34-year low of 160.245. That led Japanese authorities to spend roughly 9.8 trillion yen to support the currency.

It briefly tumbled in European trading to 158.75 per dollar, and was last 0.1% weaker at 159.65. The dollar fell after seven straight days of gains.

“The Japanese track record suggests that they do not target a specific level,” said Marc Chandler, chief market strategist, at Bannockburn Forex in New York.

“So why is the market testing the BOJ (Bank of Japan) again? One of the reasons is that there has been a camp that’s very skeptical about the merits of intervention when interest rates are so wide.”

U.S. 10-year yields were last at 4.251%, while 10-year Japanese government bonds yields were at 0.99%.

Earlier, Japan’s top currency diplomat Masato Kanda said authorities will take appropriate steps if there is excessive foreign exchange movement, and that the addition of Japan to the U.S. Treasury’s monitoring list would not restrict their actions.

The yen has come under renewed pressure after the BOJ’s decision this month to postpone reducing bond-buying stimulus until its July meeting. It has been down 1.4% against the dollar so far in June, and nearly 12% weaker this year.

A summary of opinions at the BOJ’s June policy meeting today showed some policymakers called for raising interest rates in a timely fashion as they saw a risk of inflation overshooting expectations.

INFLATION TEST, PRESIDENTIAL DEBATE LOOM

The spotlight this week will be on Friday’s release of the U.S. personal consumption expenditures (PCE) price index, which the Federal Reserve relies on to gauge progress in getting inflation down to its 2% target.

A number showing price pressures easing is likely to bolster bets on a rate cut as early as September, which futures currently price as a 70% prospect.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.4% to 105.46, sliding from a nearly eight-week high of 105.91 it touched last week.

Another focus throughout the week will be politics. The first U.S. presidential debate between President Joe Biden and his predecessor Donald Trump is on Thursday after U.S. markets close.

“Certainly there’s quite a bit of interest in whether or not the dollar is specifically mentioned,” said Brian Daingerfield, FX strategist at Natwest Markets in Stamford, Connecticut. “We know former President Trump has at times criticized the value of the dollar as being too strong.”

Meanwhile, in France, the first round of voting in the French election is on Sunday.

The euro, which has been under pressure since French President Emmanuel Macron called a snap election earlier this month, was up 0.4% at $1.0737, but was still down about 1% against the dollar in June so far.

France’s far-right National Rally (RN) party and its allies were seen leading the first round of the country’s elections with 35.5% of the expected vote, an opinion poll published on Sunday showed.

RN lawmaker Jean-Philippe Tanguy, who is widely seen as the most likely candidate to head the finance ministry if the party wins and forms a government, told Reuters an RN government would stick to the European Union’s fiscal rules.

Sterling firmed 0.4% to $1.2690. The Australian dollar gained 0.2% versus the greenback to US$0.6655, while the New Zealand dollar rose 0.2% to US$0.6129.

Meanwhile, spot yuan was trading at 7.2598 per dollar, close to its lowest in seven months, weighed by broad strength in the dollar and worries about weakness in the world’s second-largest economy.

In cryptocurrencies, bitcoin fell to its lowest since May 2nd of $59,619.21 and was last down 6% at $60,319.00. Ether dropped 6.3% to $3,302.