Yen Weakens Amid Intervention Fears and US Rate Hike Uncertainty

The Japanese yen declined on Monday and was on pace to weaken for the fifth time in six sessions as investors awaited signs of potential currency intervention. The dollar edged higher, with traders gauging the path of US rate hikes.

Investors were cautious due to lower liquidity resulting from Japan's three-day holiday. This led to concerns about a possible currency intervention, similar to what occurred in late April and early May when Tokyo intervened while markets were closed.

BOJ raised interest rates on Friday to 1.25%, the highest level in 31 years, but two dissenting votes and lack of hawkish guidance left investors hesitant to buy the yen. The yen weakened 0.36% against the dollar to 157.44 per greenback.