Yen Bounces After Rate Hike, Intervention Watch On

The Japanese yen remains in focus after a sharp weekly decline raised expectations of possible intervention from Tokyo.

The currency was trading slightly stronger at 156.64 against the US dollar on Monday, despite losing around 2% last week.

The Bank of Japan's decision to raise its policy rate to 1.25%, its highest level in 31 years, failed to provide lasting support to the yen.

HSBC Chief Asia Economist Fred Neumann noted that the BOJ faces a difficult task in convincing markets of its willingness to maintain a tighter policy stance, and investors may continue testing the central bank's commitment in coming months.