The dollar-yen pair traded at 158.45 on Friday, surrendering nearly half of its gains from the historic US-Japan coordinated intervention that briefly pushed the yen to 155.23 earlier this week. The joint yen-buying operation—the first since 1998—involved selling euros to buy yen, a move that blindsided the European Central Bank, according to the Financial Times.

Headwinds

• Interest-rate gap: The wide spread between US and Japanese rates continues to...