Yen Retreats from 11-Week High Amid Speculation of Authority Intervention

The Japanese yen weakened against major and minor currencies during Asian trading on Friday after reaching an 11-week high against the US dollar. The yen's retreat was attributed to profit-taking by traders following Thursday's sharp rally, which saw it post its largest daily gain since April amid speculation that Japanese authorities had intervened in the foreign exchange market.

The Bank of Japan left interest rates unchanged at 1.0% on Friday, reaffirming its commitment to gradually normalize monetary policy in response to rising inflation risks. The decision was approved by an 8-1 vote, with board member Hajime Takata calling for a 25-basis-point increase.

The yen's monthly performance has been positive, with it up more than 1% against the US dollar for July, putting it on track to record its first monthly gain in three months. The Bank of Japan said inflation remains close to its 2% target but warned that upside risks persist, particularly due to higher energy costs and the yen's weakness.