Yen Volatility Sparks Intervention Watch Amid Global Rate Hikes

The yen remains volatile after dropping by 2% last week and is being closely watched for potential intervention by the Bank of Japan (BOJ). Despite a rate hike to 1.25%, the highest level in 31 years, investors were disappointed by two dissenting votes and lack of hawkish guidance.

Fred Neumann, chief Asia economist at HSBC, said the BOJ's messaging has become harder due to the Federal Reserve's unanimous decision to raise its policy rate.

The yen had firmed up in early September but surrendered some gains since then. Traders are now waiting for an official intervention to prop up the currency, which is currently trading at 156.64 per US dollar.