The Japanese yen strengthened against the US dollar on Wednesday, with the USD/JPY pair falling below the 157 mark, supported by repeated warnings from the Japanese government over currency levels and quarter-end capital flows.

During Asian morning trading, the yen rose as much as 0.6%, with USD/JPY touching 156.38, making the yen the best performer among G-10 currencies.

Japan's top currency official, Atsushi Mimura, told Reuters on Monday that the Japanese Prime Minister, the Finance Minister, and the US side have recently sent "very clear" messages regarding the yen's depreciation. Japanese Prime Minister Sanae Takaichi also stated that US President Donald Trump expressed similar concerns about the weak yen when they met last week.

OCBC strategist Moh Siong Sim said: "The market seems to be gradually embracing the view that policy may shift to be more supportive of the yen. Since Trump expressed concern about the yen's weakness, the yen has remained firm since the start of this week."

Speculation is mounting that the Bank of Japan will raise interest rates further. After hiking the benchmark rate to 1.25% earlier this month, the Bank of Japan could raise rates again as early as next month.

So far this quarter, the yen has appreciated by approximately 3.6%. Previously, Japan and the United States conducted their first joint intervention in 15 years in July to support the yen.

Shinya Koike, head of the global market trading department at Sumitomo Mitsui Trust Bank, said that quarter-end capital flows may also be one of the reasons for the yen's rise.