BOJ Rate Hike Sparks Yen Wobble Amid Intervention Fears

The Bank of Japan's (BOJ) decision to raise interest rates to 1.25% on Friday has had an unexpected effect on the yen, causing it to wobble.

The rate hike was seen as dovish by traders, as two policymakers dissented and officials didn't outline a clear path for future increases.

This lack of clarity led to the yen initially weakening instead of strengthening, which is typically what happens when interest rates rise.

However, traders took notice when Nikkei reported that officials had conducted rate checks, asking banks for live exchange-rate quotes to gauge market conditions. This was seen as a warning sign that intervention, or direct buying of yen in the market, could follow.