The dollar-yen pair is inching to the 150-level. The Japanese currency weakened against the dollar in Tokyo on Tuesday morning, sinking to a fresh low for the year.

Investors are watching whether Japanese financial authorities will intervene to prop up their currency.

Japanese Finance Minister Suzuki Shunichi said on Tuesday, "It is important that exchange rates remain stable, reflecting fundamentals. The government will continue to be on alert and always be ready to respond."

The dollar-yen pair was being traded in the upper 149-yen range against the dollar in Tokyo early Tuesday.

If the rate moves beyond 150, that would mark the dollar's highest level against the Japanese currency since October last year.

Upbeat US manufacturing data released on Monday prompted market watchers to believe that the Federal Reserve will continue to keep interest rates high.

The yield on the benchmark Treasury note rose above 4.7 percent for the first time in about 16 years. That movement highlighted the wide interest-rate gap between the US and Japan, prompting investors to sell the yen and buy the higher-yielding dollar.