Japan spent $74 billion propping up the yen. Investors say the real battle is with the Fed

The yen rose on Monday, helped by comments from Bank of Japan Governor Kazuo Ueda who left the door open to a near-term rate hike. Javier Ghersi | Moment | Getty Images The yen 's slide to a fresh four-decade low is underscoring a difficult reality for Japan: it can spend billions defending its currency, but it may not be the Bank of Japan that ultimately pulls it out of the rut. The Japanese currency weakened to 162.83 against the dollar on Tuesday, its lowest level in 40 years, according to LSEG data. The drop has revived speculation that authorities could reenter the market after spending a record 11.7 trillion yen ($73.5 billion) in April and May buying their own currency. Yet investors and strategists told CNBC that intervention alone is unlikely to reverse the yen's decline as long as U.S. interest rates remain well above Japan's and the dollar stays broadly strong. The challenge for Tokyo lies less in its willingness to intervene than in the widening gap between the Federal Reserve and the BOJ. Stock Chart Icon Stock chart icon Japanese yen has weakened to a fresh 40 year low against the dollar "Intervention can slow a fall, punish speculative excess and signal official discomfort. But it cannot repeal arithmetic," said Christy Tan, global investment strategist at Franklin Templeton Institute. …