Yen Volatility Spooks Markets Amid Global Rate Hikes

The yen's volatility has led to speculation about potential intervention from Tokyo after a sharp decline last week, despite the Bank of Japan raising rates to their highest level in 31 years.

The rate hike on Friday did not boost the yen as two dissenting votes and lack of explicitly hawkish guidance disappointed investors, leading to a further depreciation of the currency.

Fred Neumann, chief Asia economist at HSBC, said the BOJ's messaging has become 'all the harder' because the Fed delivered a hawkish signal with its unanimous decision to raise its policy rate.

Investors are now pondering interest-rate outlooks after a wave of hikes from major central banks last week, including the Federal Reserve and European Central Bank.