Yen Takes Another Hit as BOJ Policy Decision Looms

The Japanese yen came under renewed pressure on Friday as markets tested Tokyo's resolve in the wake of a coordinated intervention to prop up the fragile currency ahead of an eagerly anticipated policy decision from the Bank of Japan.

The dollar rose as much as 0.8% to 160.690 in early trades after diving 2.4% in its biggest single-day drop since January 2023 in the previous session.

Japan conducted yen-buying, dollar-selling market intervention overnight, pulling the sagging currency from four-decade lows.

Speculators have amassed large bearish bets on the yen, with weekly data showing net short positions worth $11.65 billion, near the highest in two years.

The BOJ is widely expected to keep short-term interest rates steady at 1%, having just hiked in June, while delivering a hawkish signal as price pressures mount.