The greenback plunged from eight-week peak on Monday, with traders are now wary of potential intervention to bolster the yen, as the Japanese currency approached the 160 per dollar that had previously raised warnings from the Japanese authorities.

Previously, Masato Kanda, Japan's chief currency diplomat, stated that authorities would intervene as necessary in response to significant foreign exchange fluctuations. He also emphasized that Japan being added to the U.S. Treasury's monitoring list would not limit their ability to take action.

The yen is facing renewed downward pressure following the Bank of Japan's (BOJ) announcement this month to defer reducing bond-buying stimulus until its July meeting, resulting in a 1.5% decline for the currency in June.

The dollar index that gauges the greenback versus its major pairs dipped fell 0.41% to 105.45 dropping from eight-week peak of 105.91 hit the earlier week.

USD/JPY reached a peak of 159.94, marking its highest level since April 29, when the yen hit a 34-year low of 160.245. This prompted Japanese authorities to intervene, spending approximately 9.8 trillion yen to stabilize the currency.