Yen Steadies Amid Threat of Japanese Intervention

The Japanese yen has steadied after plummeting sharply last week, amid market concerns about possible government intervention in the foreign exchange market.

The yen had weakened by 2% last week and stood at 156.85 per US dollar on Monday (21/9), following a national holiday that kept trading liquidity low.

Despite the Bank of Japan's interest rate hike to a 31-year high of 1.25% on Friday, the yen failed to lift, with two board members opposing the increase and no clear signal from the BOJ on further monetary policy tightening.

According to Fred Neumann, HSBC's chief Asia economist, the Fed's rate hike made it more challenging for the BOJ to shift market expectations towards higher interest rates in Japan.