The Japanese yen extended its rally against the U.S. dollar on Monday, climbing nearly 1% as investors increased bets that Japanese authorities could launch another coordinated currency intervention with the United States if excessive volatility returns. Market sentiment received another boost after U.S. Treasury Secretary Scott Bessent said Washington would be willing to join additional coordinated intervention if the yen experiences renewed disorderly movements. Analysts at MUFG said the coordinated intervention marks a historic move that could continue to squeeze bearish positions against the yen in the near term. However, they cautioned that stronger economic fundamentals and monetary policy shifts will be needed for a lasting decline in USD/JPY. MUFG expects the Bank of Japan to raise interest rates more aggressively than current market pricing suggests, a key factor supporting its longer-term outlook for a stronger yen and lower USD/JPY levels.