Dollar Strengthens Against Yen Amid Rate Hike Uncertainty

The Japanese yen weakened on Monday after volatility late last week raised concerns about possible currency intervention.

Traders remained vigilant for signs of Tokyo stepping into the market, as Japanese markets were closed for a three-day holiday leading to low liquidity.

The dollar rose 0.2% against the yen to 157.17 yen.

In a recent decision, the Bank of Japan raised rates on Friday to their highest level in 31 years at 1.25%, but two dissenting votes and a lack of explicitly hawkish guidance left investors hesitant to buy the currency.

Following the decision, the yen fell sharply before rebounding as the Nikkei newspaper reported that Japanese officials had conducted rate checks, often seen as a precursor to currency intervention.