Yen Weakens Amid Fears of Intervention, Dollar Index Rises

The Japanese yen weakened on Monday and was poised to soften for the fifth time in six sessions as investors watched for signs of possible currency intervention.

With Japan's markets closed for a three-day holiday, liquidity was low, which could lead to an outsized move in the yen. The Bank of Japan raised interest rates on Friday to 1.25%, but two dissenting votes and lack of hawkish guidance left investors hesitant to buy the currency.

The yen fell sharply after the rate decision before a slight rebound as reports emerged that Japanese officials had conducted rate checks, often seen as a precursor to currency intervention.