BOJ's Rate Decision Leaves Yen Under Pressure Amid Intervention

The Japanese yen continues to weaken against major currencies, particularly the US dollar. On Friday, the BOJ kept interest rates steady at 1% as expected, but markets remain under pressure after a coordinated intervention in the wake of a massive single-day drop for the dollar. The dollar extended gains, trading up 0.81% at 160.760 yen, after its previous session's dive of 2.4%, its biggest single-day drop since January 2023.

Speculators have amassed large bearish bets on the yen, with net short positions worth $11.65 billion, near the highest in two years, according to a US regulator. The won also rose to a nine-month high before paring some gains, standing at 1,438.1 against the dollar in early trade, down more than 1%.

BOJ Governor's comments suggest that Tokyo is committed to supporting the yen through intervention and interest rate hikes. Analysts expect another rate hike by year-end, but Chris Weston, head of research at Pepperstone, cautions that a leveraged position against the yen could lead to significant losses.