Japan's authorities have warned that they are willing to take action against excessive fluctuations in the dollar-yen exchange rate. Some investors believe that market intervention to prop up the yen could take place soon.

The Japanese currency was trading at around the 148 level against the greenback on Wednesday afternoon. The weakness stems from the view that the US Federal Reserve will continue tightening its policy to curb inflation.

Kanda Masato, Japan's Vice Minister of Finance for International Affairs, said, "Japan is in close communication with authorities overseas, particularly those in the United States. We share the view that excessive fluctuations in exchange rates are undesirable for the economy."

Kanda added that the Finance Ministry is monitoring the situation closely. He said it will take appropriate steps against extreme movements, with no options ruled out.

American media have quoted US Treasury Secretary Janet Yellen as saying that any intervention by Japan to lift the yen would be understandable if it were aimed at smoothing out volatility, rather than affecting exchange-rate levels.

She reportedly said the US and Japan are in communication about such interventions.