Yen Weakens as Investors Watch for Signs of Japanese Intervention

The Japanese yen weakened on Monday and was set to fall for the fifth time in six sessions as investors waited for signs of possible intervention from Tokyo. The dollar edged higher as markets gauged the path of U.S. rate hikes.

Investors were cautious due to low liquidity, which can lead to large price movements. The yen fell 0.36% against the greenback to 157.44 per dollar after a three-day holiday in Japan. This followed the Bank of Japan's interest rate hike on Friday to 1.25%, its highest level in 31 years.

However, two dissenting votes and lack of explicit hawkish guidance left investors hesitant to buy the currency. The Nikkei newspaper reported that Japanese officials had conducted rate checks, often seen as a precursor to intervention. Marc Chandler, chief market strategist at Bannockburn Capital Markets in New York, said: 'I don't think that intervention at 157, 157 and a half is very likely.'