Yen rose in Asian trade on Monday against a basket of major rivals, extending gains for the third straight session and moving away from 38-year lows.
The gains come amid speculation the Bank of Japan likely intervened in the forex market to boost the yen against main rivals during the US holiday on Thursday.
The Price
The USD/JPY pair fell by 0.3% to 160.26, with a session-high at 160.81.
The pair rose 0.3% on Friday, the second profit in a row away from 38-year lows at 161.95.
The yen also benefited from lower US treasury yields following a spate of grim US data.
Japanese Authorities
The Japanese government was rather mute on the issue of the weakening yen last week, with the finance minister Shunichi Suzuki simply saying the government is monitoring the situation.
However, traders are speculating the government has already intervened on Thursday during the US Fourth of July holiday.
BoJ Intervention
The Bank of Japan first intervened in the forex market in late April after the yen fell below the 160 barrier per dollar for the first time since 1990.
Back then the BOJ chose the timing of a US holiday to guarantee limited liquidity in the market.
US Yields
US 10-year treasury yields traded near a week low at 4.271% on Monday, hurting the dollar’s appeal.
It comes following a batch of weak US data last week, which showed the services sector contracted for the first time since January 2023, in turn boosting the odds of a Fed interest rate cut in September to 78%, and to 87% in November.
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