(Bloomberg) -- The yen capped its longest losing streak since March, ramping up the risk that Japanese officials will once again step in to prop up the currency. 

The currency traded around 158.90 per dollar, near the closely watched level of 160 per dollar. It weakened for a sixth-straight session on Thursday, the worst stretch of losses in three months. Japan’s top currency chief Masato Kanda reiterated on Friday that the government will take proper action as needed.

The yen weakness comes amid a persistent divergence in yields between Japan and its major peers, including the US. It follows Bank of Japan policymakers declining to lay out details on a reduction in bond buying at the central bank’s June meeting. Without a time-line, traders are left wondering when Japan will normalize its policy, a step that should support the yen.

“As long as US-Japan rate differentials exceed a certain threshold, it is possible that yen selling due to carry trades will not decline even with some narrowing of rate differentials,” Barclays strategists led by Shinichiro Kadota wrote in a note Thursday. They now see the dollar-yen pair trading around 160 through the end of the year.

On Thursday, the US Treasury announced the addition of Japan to a foreign-exchange monitoring list as part of a report to Congress, but didn’t name Japan or any other country as currency manipulators. While mentioning Japan’s April and May interventions, the report focused on the country’s large bilateral trade and current-account surpluses.

In response, Kanda said the US report doesn’t identify any problem with Japan’s foreign exchange policy and that intervention isn’t intended to change the direction of currency movements.

He said in February that a 10-yen move over one month against the dollar is considered rapid. A gauge measuring dollar-yen’s change from the lowest level seen in the past 28 days stood at 5.35 yen on Friday, indicating intervention may be unlikely until the pair reaches at least 163.

The nation is suspected to have intervened after dollar-yen hit 160.17 on April 29, the highest since 1990.

“I’m more and more convinced that currency officials are giving up on the yen,” said Helen Given, a foreign-exchange trader at Monex Inc. “The yield differential is just too much to overcome right now, and with the US now only eyeing one cut this year it’s not going to materially improve anytime soon.” 

--With assistance from Robert Fullem and Masaki Kondo.

(Added Kanda’s comment and a second chart.)

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