Japanese authorities may tolerate a moderate weakening of the yen but could intervene if the currency depreciates sharply to around 160 yen per dollar, said a former central bank official who was involved in Tokyo's currency interventions a decade ago.

On Friday, the yen is on track for its sharpest weekly drop in a year after the surprise election victory of soft fiscal and monetary policy advocate Sanae Takaichi.

Many market participants see the 160 yen per dollar level as a "red line" for the authorities, at which point intervention becomes more likely. In fresh verbal warnings, Finance Minister Katsunobu Kato said on Friday that the authorities are keeping a close eye on excessive and disorderly exchange rate fluctuations. The USD/JPY pair quotes found resistance in the area of 153.00.