NEW YORK, June 24 — The dollar eased from a near eight-week high today, with traders back on alert for intervention to support the yen after the Japanese currency flirted with the ¥160 per dollar level that had earlier drawn verbal warnings from Japanese authorities.

Dollar/yen topped at ¥159.94 in early trade, its highest since April 29, when the yen touched a 34-year low of ¥160.245, leading to Japanese authorities spending roughly ¥9.8 trillion to support the currency.

It briefly tumbled in the European morning to ¥158.75 per dollar, and was last 0.28 per cent weaker at ¥159.35.

"Certainly didn't look like intervention ... nonetheless, it does speak to how jittery the market likely is about the prospect for intervention," said Michael Brown, senior research strategist at Pepperstone.

"I think so long as any further weakness is not especially rapid or disorderly in nature, the MoF (Ministry of Finance) are unlikely to step in just yet."

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 US Treasury's monitoring list would not restrict their actions.

The yen has come under renewed pressure after the Bank of Japan's (BOJ) decision this month to postpone reducing bond-buying stimulus until its July meeting. It is down 1.5 per cent in June.

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

The yen, which is highly sensitive to US Treasury yields, is down more than 10 per cent against the dollar so far this year, weighed down by the wide difference between interest rates in Japan and the United States.

"We are all trying to figure out if there is a specific level that the MOF may have in mind in terms of defense or whether or not it comes down to general market conditions," said Brian Daingerfield, FX strategist at Natwest Markets in Stamford, Connecticut.

Inflation test ahead

The spotlight this week will be on Friday's release of the US personal consumption expenditures (PCE) price index, which the Federal Reserve relies on to gauge progress in getting inflation down to its 2 per cent 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 per cent prospect.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.41 per cent to ¥105.45, edging back from a nearly eight-week high of ¥105.91 it touched last week.

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

"Certainly there's quite a bit of interest in whether or not the dollar is specifically mentioned," said Daingerfield. "We know former President Trump has at times criticized the value of the dollar as being too strong."

The first round of voting in the French election is on Sunday.

"You're going to see a lot of defensive positioning going into the first round of the French election and US presidential debate," said Simon Harvey, head of FX analysis at Monex.

The euro, which has been under pressure since French President Emmanuel Macron called a snap election earlier this month, was up 0.44 per cent at US$1.0738 but was still down about 1 per cent 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 per cent 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 strengthened 0.28 per cent at $1.268. The Australian dollar strengthened 0.18 per cent versus the greenback to US$0.6651 and the kiwi strengthened 0.16 per cent.

Meanwhile, spot yuan was trading at 7.2585 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 10 and was down 4.52 per cent at US$61,267.00. Ethereum declined 5.98 per cent at US$3310.26. — Reuters