Amid suspected intervention, Japan's yen experienced a tumultuous week. Here's what you need to know.

• On Monday, the yen reached its highest level against the greenback since 1990, at 160.03, but later weakened to 156 levels due to speculation about Japanese intervention.
• On Wednesday, the currency strengthened by more than 2% to trade near 153 against the dollar, which may have been due to an intervention, as some market analysts suggest.
• According to Bank of America Global Research, the first suspected intervention could have been between 5 trillion and 6 trillion yen ($32.7 billion to $39.2 billion), based on Bank of Japan data.

On Monday, the Canadian dollar weakened to levels not seen in 34 years against the U.S. dollar, but later rebounded and is likely to have its best week in more than a year.

On Monday, the yen reached its highest level against the greenback since 1990, at 160.03, but later weakened to 156 levels due to speculation about Japanese intervention.

On Wednesday, the currency strengthened by more than 2% to trade near 153 against the dollar, which may have been due to an intervention, as some market analysts suggest.

Japanese officials have not yet released an official statement regarding their involvement in supporting the currency.

Japan strategist at CLSA, Nicholas Smith, stated on CNBC that the government's refusal to disclose whether they've been intervening or not has led many people to believe that they have been.

The yen is now trading at 152.90 against the dollar.

According to Bank of America Global Research, the first suspected intervention could have been between 5 trillion and 6 trillion yen ($32.7 billion to $39.2 billion), based on Bank of Japan data.

The second likely intervention could have been smaller than the first, according to BofA Research.

The line in the sand

Several analysts had predicted that the BOJ and Japan's Ministry of Finance would intervene when the yen reached levels between 155 and 160.

Despite the BOJ's monetary policy decision last Friday and warnings from Japanese authorities, the weakness in the yen persisted.

Since the Bank of Japan's historic meeting in March, the yen had lost 7.3% as of Monday's low, ending the world's only negative rates regime.

The first suspected intervention occurred after the currency reached 160 against the dollar.

The yen was affected by the dollar's continued strength and the Federal Reserve's watered-down expectations for early interest rate cuts, as recent U.S. inflation readings came in hotter than expected, highlighting the difficulty the U.S. central bank faces in controlling inflation.

Over the past few years, while other international central banks have tightened their monetary policies, Japan has kept its ultra-loose approach, resulting in a buildup of carry trades involving the Japanese yen.

Investing in high yielding assets in another currency by borrowing in low interest rate currencies such as the yen is a strategy known as a carry trade, which results in profits from the rate spread.

What's next?

The BOJ kept its benchmark policy rate at 0%-0.1% during its recent monetary policy meeting on April 26. BOJ Governor Kazuo Ueda acknowledged the unpredictable fluctuations in the yen at a press conference following the meeting. Although he assured markets that the authorities were closely monitoring the situation, he did not reveal any specific actions that might be taken to address the volatility.

Market participants believe Japanese authorities will intervene further to prop up the currency.

"According to Edward Yardeni, president & chief investment strategist at Yardeni Research, the Bank of Japan will likely have to continue intervening, which will remain a problem for Japan but not have significant global consequences."

The BOJ aims to achieve the goal of "reflating" the economy this year, according to HSBC, which stated that the weakness in the yen is a crucial factor in this process.

HSBC's chief Asia economist, Frederic Neumann, wrote in a client note that after years of losing competitiveness, exporters are finally experiencing a lift from exchange rate realignment. However, he suggests that a weaker exchange rate for an even longer period may be necessary to turn the lift into a sustained manufacturing renaissance.

The weaker yen is benefiting Japan's service sector through tourism, which is raising inflation expectations.

The BOJ will not rush into aggressive tightening if the yen weakens, as long as the decline is orderly, according to Neumann.