Yen falls amid intervention concerns while US dollar holds steady

On Monday the Japanese yen declined following heightened alertness for possible intervention after volatile moves late last week, compounded by low liquidity during a three-day market holiday. The US dollar gained roughly 0.2% against the yen, reaching 157.20 per dollar, as central banks in the US and Europe continued tightening. The Bank of Japan raised its policy rate to 1.25%, the strongest level in three decades, yet two dissenting votes and a lack of strongly hawkish language dampened demand for the yen.

Reports of Japanese officials conducting rate checks, a typical precursor to intervention, were noted but did not halt the yen's fall. The dollar index stayed steady at 100.23 after a recent rise, with market participants pricing a higher probability of an upcoming Fed hike. The euro and sterling showed little movement against the dollar.