Yen Weakens After Coordinated Intervention Ahead of BOJ Decision

The Japanese yen has come under renewed pressure on Friday as markets test Tokyo's resolve after 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, rebounding from its biggest single-day drop since January 2023 in the previous session.

Japan conducted yen-buying, dollar-selling market intervention overnight in the New York session, pulling the sagging currency from four-decade lows. The country's top foreign exchange diplomat said Tokyo was receiving support from the United States that 'goes beyond psychological support.'

'Coordination is a strong positive for the yen and will definitely make speculators think twice,' said Chris Weston, head of research at Pepperstone.

The BOJ meeting follows the U.S. Federal Reserve's decision to leave interest rates unchanged, which bruised the dollar as traders questioned whether the Fed's new chief was serious about containing inflation.