Japan and the United States intervened jointly in currency markets to support the yen for the first time since 2011, but the currency has already given back nearly half of its gains as traders test the resolve of both governments.
The yen weakened by 1% on Monday, closing at 159.29 per dollar, the worst performance among Group-of-10 currencies. That means the intervention has had limited impact so far.
Officials from both Japan and the U.S. have warned investors that they are determined to keep defending the yen if needed. The joint action was the first since 2011, when the two countries coordinated to weaken the yen following the earthquake in eastern Japan.
Japanese carmakers expect the yen to remain near its post-intervention levels, suggesting they view the move as a brake on extreme swings rather than a shift in the currency's fundamental direction.
The yen's prolonged weakness has become a growing concern for Japanese policymakers, as it raises the cost of imports and adds to household living costs. It has also become a worry for the United States.