The Japanese yen plunged to 162.40 against the dollar on Tuesday, marking its weakest intraday level since 1986. Finance Minister Satsuki Katayama signaled that authorities stand ready to take decisive action in the foreign-exchange market if needed. The currency traded 0.1% lower at 162.08 per dollar, extending losses amid growing intervention expectations.

Risk-on sentiment lifted the dollar while pressuring the safe-haven yen. Signs of resuming U.S.-Iran peace talks and Wall Street's tech-driven rebound overnight bolstered appetite for riskier assets. Meanwhile, divergent monetary policy paths between the Bank of Japan and Federal Reserve continued weighing on the currency. BOJ's cautious approach to rate hikes contrasts sharply with Fed tightening expectations.

Katayama confirmed with U.S. officials that decisive FX action remains an option for market stability. This follows Japan's history of intervening to stem excessive yen weakness, though recent verbal warnings have so far kept actual intervention at bay. Traders now watch for concrete policy signals amid mounting pressure on Tokyo's policymakers.

The yen's slide reflects broader trends in global currency markets where safe-haven flows and interest rate differentials drive daily volatility. With 162.40 now the benchmark low, any official intervention would likely target this psychological threshold.