BOJ Hawkish Signal Expected as Yen Weakens Post-Intervention

The Japanese yen has come under renewed pressure after surging in the previous session following Tokyo's intervention in the currency markets. The Bank of Japan (BOJ) is set to make a policy decision, and traders are anticipating a hawkish signal from the central bank as price pressures mount.

The dollar gained 0.45% against the yen, reaching 160.175 in early trades, after plummeting 2.4% in its biggest single-day drop since January 2023 in the previous session. Japan intervened in the currency markets by conducting yen-buying, dollar-selling market intervention in the New York session overnight.

Rodrigo Catril, senior FX strategist at National Australia Bank, commented that it was a good time for intervention, given the weaker dollar amid pressure at the front end of the U.S. rates market and positive risk sentiment.