Yen Vulnerability Persists Amid BOJ Tightening

The yen has been on a downward spiral, dropping by over 2% last week. The Bank of Japan raised its benchmark rate to 1.25%, the quickest tightening tempo in over 30 years, but two policy board members opposed the decision.

Later reports suggested officials called dealers for a rate check, which trimmed the day's losses but didn't erase them.

The yen faces a liquidity squeeze due to Japan's three-day market break from Wednesday. Thin conditions can amplify any government support and lead to sharp intraday swings.

In late July, the US teamed up with Japan to intervene in the market, lifting the yen by over 6%.