TOKYO, April 30 Reuters The yen dropped against the dollar on Tuesday, giving up some of its sharp gains the previous day sparked by suspected intervention by Japanese authorities.

The currency was down 0.40 to 157.00 per dollar, but off its 34year low of 160.245 hit on Monday when traders say yenbuying intervention by Tokyo drove a eyecatching rebound of nearly six yen.

Japanese authorities haven39;t confirmed that they had stepped into the currency market in support of the yen, but markets remain on heightened intervention alert ahead of the Federal Reserve39;s monetary policy review this week.

Official figures that would reveal whether intervention did in fact occur won39;t be available until late May.

While some market players had zeroed in on 160 yen per dollar as the possible trigger for intervention, analysts said Japanese authorities may not be targeting particular levels.

The Japanese currency still sits lower than it was before the Bank of Japan39;s BOJ policy announcement last week. It has also suffered its largest monthly decline since January.

Investors expect Japanese bond yields will remain low for an extended period. In contrast, U.S. rates are still relatively high and provide enough latitude for yen bears.

Facing that the rates divergence with forex intervention typically does not end well, said Garvey Padhraic, regional head of research Americas at ING.

The more obvious solution to this is for Japanese rates to rise. If they don39;t, something…