Yen Squeezed as Hawkish Central Banks Leave Japan Behind

The Japanese yen is under pressure from a firm dollar as traders bet that Japan's central bank will struggle to keep up with a hawkish turn by global policymakers.

This move has left Japan's interest rates at a wide gap with major peers, making the yen vulnerable to a decline. According to reports, Japan checked dollar/yen rates on Friday, which is often a precursor to intervention in the market.

The risk of intervention and a holiday in Japan contained moves on Tuesday, but traders remain cautious about the yen's prospects. The central bank's decision to lag behind global peers has put pressure on the currency, making it less attractive to investors.