21.09.202600:27:49UTC+00Yen Consolidates Amid Holiday-Thinned Trading

The Japanese yen steadied around 157 per dollar on Monday after sliding more than 2% last week, as traders stayed alert to the risk of official intervention at the start of Japan’s three-day holiday. Tokyo has a history of stepping into currency markets when liquidity is thin during holidays, and concerns intensified following reports that the Bank of Japan conducted a rate check with market participants late Friday — a move often seen as a precursor to intervention.

The yen’s sharp decline last week followed a widely expected BOJ interest rate hike, with two policymakers dissenting from the decision. Governor Kazuo Ueda reaffirmed that the BOJ remains committed to gradually raising rates and fine-tuning the scale of monetary accommodation in line with evolving economic conditions, while emphasizing that overall policy will remain supportive to underpin growth. The currency also faced additional downward pressure as markets anticipated that Japan’s rate-hike cycle will proceed more cautiously than that of the US Federal Reserve.